Gate Introduces PoSEC Asset Security Verification System

Cryptocurrency exchange Gate announced the launch of the Proof of Security (PoSEC) system on November 5, 2026, to assess the security of asset storage. According to the published data, the calculated coverage ratio of client funds by cold reserves was 104.58%. The figure is currently undergoing independent verification.

The new system complements the Proof of Reserves (PoR), which is used to confirm the adequacy of reserves of cryptocurrency platforms.

Unlike PoR, PoSEC focuses on the asset storage structure and the assessment of potential losses in case of compromise of hot wallets connected to the internet.

The main indicator of the system is the coverage ratio of client obligations by cold storage assets. According to Gate's methodology, a value above 100% means that the corresponding reserves are sufficient to compensate client balances even in the event of a complete loss of hot wallet assets.

The calculation uses data on the distribution of assets across different storage methods and their ratio to liabilities to users.

What Gate's Coverage Ratio Shows

As of November 4, 2026, at 00:00 UTC, 88.26% of the exchange's assets were in cold storage, and 11.74% were in hot wallets.

Gate includes in the cold storage category not only cryptocurrencies whose private keys are in an offline environment but also traditional financial assets managed by independent custodians.

For an asset to be considered in this category, it must not be directly used for everyday deposits and withdrawals. Its movement should require the agreement of multiple parties, and its existence and value should allow for independent verification.

The 104.58% ratio is calculated by comparing the share of cold storage with the share of client assets in the overall reserve structure.

The company uses data from two different reporting periods. The storage structure was fixed on November 4, while the share of client obligations was taken from the previous Proof of Reserves report.

Gate warns that changes in asset values and fund movements between snapshot dates are not accounted for. Therefore, the published ratio itself does not confirm full coverage of client obligations on a single reporting date.

Independent Verification Still Ongoing

Gate reported that an engaged auditing organization is verifying the existence of assets, control rights over them, valuation principles, and the accuracy of the coverage ratio calculation.

The final report is planned to be published on the official website after the verification is completed. The completion timeline has not yet been disclosed.

Previously, Gate used Proof of Reserves with the application of Merkle trees and zk-SNARKs cryptographic proofs.

As of October 18, 2026, the exchange reported reserves of approximately $8.69 billion against client obligations of about $7.33 billion. The overall reserve coverage ratio was 118.49%.

In addition to disclosing reserves, Gate claims to use multi-signature, multi-party computation (MPC), separation of hot and cold wallets, and risk monitoring.

The new system expands the volume of published information about asset storage but does not eliminate the risks of key compromise, internal procedure violations, and other cyberattacks.

Gate intends to develop the PoSEC methodology and offer its use to other market participants. However, at the time of the announcement, the system remains an initiative of the exchange itself, and the declared figures have not yet received independent confirmation.