Gate has unveiled a new asset verification framework called Proof of Security (PoSEC), positioning itself as the first digital asset trading platform to deploy such a system. The exchange, which has operated since 2013, said the framework broadens security verification beyond reserve adequacy to include how assets are stored and how well they cover losses in extreme scenarios.
What PoSEC measures
Unlike Proof of Reserves (PoR), which focuses on whether an exchange holds enough assets to match user balances, PoSEC adds a layer that examines the structure of asset storage. It publicly discloses how assets are split between cold storage and hot wallets, giving users visibility into where funds are held and how much protection exists if hot wallet holdings were compromised.
The framework introduces a cold storage coverage ratio as its central metric. A ratio at or above 100% indicates that, under the applicable methodology, cold storage alone would cover all user assets even if every asset in hot wallets were lost. PoR and PoSEC are described as complementary, together extending verification from reserve adequacy to storage security and risk coverage.
Cold storage coverage at 104.58%
According to a snapshot taken at 00:00 UTC on November 4, 2026, Gate reported a cold storage coverage ratio of 104.58%. Cold storage accounted for 88.26% of total assets, while hot wallets held 11.74%. Cold storage assets include digital assets kept offline as well as traditional assets held under independent custody.
To qualify, assets must meet several conditions: they cannot be used directly for routine deposits and withdrawals, must be held offline or under independent custody, require multi-party authorization for transfers, and be independently verifiable. The current figures are undergoing review by an independent third-party audit firm, covering asset authenticity and control, valuation and calculation methodologies, and the coverage ratio calculation. The audit report will be published on Gate's official website once completed.
Building on earlier reserve work
Gate has a track record in reserve transparency. In 2020, it was among the first platforms to introduce an open-source PoR mechanism and a Merkle Tree-based asset verification solution. It later added technologies such as zk-SNARKs to strengthen its reserve verification framework.
As of October 18, 2026, Gate reported total reserves of approximately $8.688 billion and an overall reserve ratio of 118.49%. The platform also uses hot and cold wallet segregation, multi-signature technology, Multi-Party Computation (MPC), dynamic risk monitoring, and zero-trust access control as part of a multi-layered security framework.
Industry context
The launch comes as exchanges face continued scrutiny over asset custody and transparency following high-profile failures in the sector. Several platforms have introduced or expanded reserve verification and custody arrangements in response. Gate said it will continue developing PoSEC standards and verification mechanisms and work with other industry participants to improve asset security and transparency.
Founded in 2013 by Dr. Han, Gate serves more than 62 million users globally and supports trading across 5,400+ digital assets and 12,800+ stock assets and ETFs, along with traditional finance assets including metals, stocks, indices, forex, and commodities.
This article is for informational purposes only and does not constitute financial advice.
