Former Employee Exposes Gate's gStocks Lacking Underlying Assets
A former employee has accused Gate's gStocks of lacking underlying assets and trading channels, claiming it is a blatant fraud that simulates stock issuance.
The materials state that gStocks has no named issuer, no 1:1 reserve proof mechanism, no on-chain smart contracts, and has not disclosed upstream brokers or custodians; the page information and layout are almost identical to CFDs, actually quoting retail investors through CFDs rather than the claimed real stock trading.
The whistleblower claims that Gate's internal backend issues and prints U.S., Hong Kong, Japanese, Korean stocks, and even over 80 A-shares, with retail investors buying "air coins"; the page only shows the best quotes, lacking depth and any order book.
In the Pre-IPO products, SpaceX, OpenAI, and KIMI Phase III have not disclosed the issuers; KIMI's announcement clearly states it as "mirror notes," which do not represent actual stocks or shares of Moonshot company, and the Dark Side of the Moon has stated that there are no so-called old shares, agents, intermediaries, or authorized channels, and has reported to the public security authorities.
Gate's announcement for Korean stocks claims that USDT can be directly used to participate in stocks listed on the Korean exchange, but has not provided broker, dealer, or custody information; Hanlin internally stated that as long as liquidity is good, they are not afraid of no one coming to trade, as people in the crypto market are all gamblers.
The whistleblower compares platforms like Ondo, OKX xStocks, Binance bStocks, and Bitget Reality, which all disclose issuers, reserves, and custody information, while Gate has not disclosed corresponding underlying stock assets, on-chain data, or connected broker custody.
Source: Public Information
ABAB AI Insight
The former employee's materials accuse Gate of not connecting with real brokers or custodians in gStocks and Pre-IPO products, distributing and pricing internally, packaging U.S., Hong Kong, Japanese, and Korean stocks as tradable assets, while selling popular company names in the form of mirror notes in Pre-IPO; the Dark Side of the Moon publicly denies the related old shares and authorized channels and has reported to the police.
In terms of capital flow, users participate with real money like USDT, receiving digital certificates that are self-priced, self-explained, and self-redeemed by the platform, lacking verifiable underlying assets, reserve proof, and on-chain contracts; compared to other RWA platforms that disclose issuers and custody, Gate has not provided corresponding certificates.
This is similar to historical cases where some platforms sold stock exposure in the form of synthetic assets or CFDs without actually holding the underlying assets, or in the crypto field, issuing tokens with popular company names without underlying certificates; currently, it is a phase where RWA and Pre-IPO products are rapidly launched, and some platforms have inconsistent disclosure standards.
Essentially, this represents information asymmetry and concentrated pricing power: the platform controls quotes, depth, and redemption rules, causing user funds to enter an internal system lacking external custody and verifiable links; without underlying assets and custody, the product transforms from real stock exposure to platform credit and internal pricing, making the flow of funds dependent on the platform's own explanations rather than external markets or custodians.
ABAB News · Law of Cognition
Without underlying assets and custody, the product is the platform's credit
Mirror notes and self-priced digital do not equal real stocks
Lack of disclosure makes funds enter unverifiable internal systems