Cryptocurrency exchange Gate is under growing scrutiny after a user said their account was compromised and about $1.7 million was lost. The exchange first said there was no systemic security vulnerability on the platform and that the account’s key actions had passed multiple verification checks. Later, as public criticism mounted, Gate changed its tone and said it had made direct contact with the user and set up an internal expert team to help trace the funds.
Gate moved from denial to active assistance
In a July 8 statement posted by Gate Chinese, the company addressed online claims that “Gate lost $1.7 million” and said the case was not a systemic risk issue or a website security problem. It also said customer assets and accounts across the platform remained secure. Gate added that it had reconstructed the case timeline and disclosed operational facts while hiding specific timestamps for privacy reasons.
That position softened in a later statement dated July 10. Gate said that after receiving the user’s report, it immediately established contact, followed the case in real time, and kept communication open throughout the process. The company also said it formed an internal expert group to assist in tracing the relevant fund flows.
According to the latest statement, Gate has completed document collection and verified the sequence of events with the user. It said it is now helping with applications for freezing funds and seeking recovery, while also urging the user to file a formal police case and pursue judicial assistance. Gate said it would fully cooperate if the matter proceeds into legal channels.
Apology centered on communication, not a platform breach
Gate’s apology focused on how the incident was handled rather than on admitting any system compromise. In response to criticism over customer service, the exchange said it attaches great importance to its internal service process and will introduce clearer communication standards while strengthening interaction with its user community.
The company also apologized to the affected user and to online communities following the case, and thanked the public for criticism and suggestions.
Still, Gate kept a clear line on liability. It did not say its systems had been breached, and it did not accept compensation responsibility. Instead, it framed its role as one of assistance in tracing, freezing, and recovering assets, while maintaining that the account activity recorded on its systems had passed the required security verification steps.
Exchange says critical account changes cleared verification
Gate said several key actions on the account were completed through its security process, including facial verification, submission of a handheld identity video, email change, login password reset, authenticator reset, and fund password reset.
The exchange had also raised another possibility earlier: that the user’s device or related accounts may have been compromised, allowing an attacker to obtain enough information to pass verification. Gate further said the user had confirmed that some older records matched the account identity, including payment information from 2019.
Under Gate’s account of the case, the withdrawals involved about 49.96 ETH, 746,475 HSK, and 1,565,982 USDT. The company said those withdrawals were the result of a chain of account actions that had already passed verification.
User denies authorization and questions facial verification process
The user, however, said on social media that none of the actions were authorized. The user also said they used a passkey, had disabled cloud synchronization for the authenticator, and only used the official app, describing their personal security practices as strict.
The user said a possible explanation is that an attacker used deepfake video or similar material to pass facial verification. They also asked Gate to explain who submitted the identity materials and how the account’s security settings could have been reset without their knowledge.
In a public response, the user said that regarding Gate’s claim that the facial authentication was completed by the account holder, they had released video evidence showing that during the period marked as 19:44:XX UTC+8 on July 4, 2026, they were playing with their son, had not picked up a phone for facial recognition, and had not carried out any Gate-related operation.
Key facts remain disputed
At this stage, neither side has publicly presented evidence that definitively settles the case. Gate says the operational record is complete and that the actions passed verification. The user says the actions were never authorized. The central question remains unresolved and is still subject to further investigation.
The dispute has again drawn attention to the boundaries of exchange responsibility in account theft cases. If platform logs show that all steps passed security checks while the user insists they never approved them, the question becomes whether an exchange’s duty ends with record verification or extends to more proactive remediation and assistance.
The report noted that as deepfakes, social engineering, and device intrusion methods become more sophisticated, existing KYC and multi-factor verification may not fully address user expectations around asset security. Gate is currently trying to ease the controversy by helping pursue fund recovery, cooperating with judicial investigation, and improving customer communication, but it has not changed its core view on responsibility.
If later investigation can clarify the source of the identity verification materials, the account reset process, and the path of the funds, those findings will be central to judging both platform responsibility and user-side risk.