Gate PoSEC, the exchange’s new Proof of Security framework, reported a cold-storage coverage ratio of 104.58%, based on a snapshot taken at 00:00 UTC on November 4. Gate announced the framework on November 5, 2026. It is intended to show how platform assets are stored and whether qualifying cold storage could cover user assets in an extreme-loss scenario.
Key Takeaways
- Gate reported 104.58% cold-storage coverage and said 88.26% of total assets were in cold storage, with 11.74% in hot wallets.
- An independent third party is reviewing the figures. Gate said it will publish a report when the review is complete.
- PoSEC adds storage information to Proof of Reserves, but does not assess every aspect of exchange security.
What Gate PoSEC reports
Gate introduced PoSEC to disclose how platform assets are divided between cold storage and hot wallets. In its November 5 announcement, Gate said the framework is intended to show whether qualifying cold-held assets could cover user assets under an extreme-loss scenario.
At 00:00 UTC on November 4, Gate reported that 88.26% of total assets were in cold storage and 11.74% in hot wallets. Its reported coverage ratio was 104.58%. Gate defines a ratio of at least 100% as meaning that, under its calculation method, cold storage alone could cover all user assets if hot-wallet assets were lost. However, Gate says the calculation compares cold-storage and user-asset shares from snapshots taken at different times.
The storage split and coverage ratio measure different things. The split gives each storage type’s share of total assets, while coverage compares cold storage with user assets. The ratio is a reported measure, not proof that customer withdrawals would be unaffected in every crisis.
Gate counts assets as cold storage only if they are not used directly for routine deposits and withdrawals, are held offline or by an independent custodian, require multi-party authorization to transfer, and can be independently verified. Gate lists these conditions on its PoSEC security page.
Gate said an independent third-party audit firm was still reviewing asset authenticity and control, valuation and calculation methods, and the coverage calculation. It said the report would be published after the review. Until then, the ratio remains a company-reported figure awaiting verification.
Background and context for Gate PoSEC
Proof of Reserves, or PoR, primarily verifies the adequacy of an exchange’s asset reserves. Gate says PoSEC adds information about asset storage and whether cold-held assets could cover user assets if hot-wallet assets were lost. The approaches address complementary questions; the reported storage coverage ratio is not a substitute for reserve reporting.
Gate says it introduced an open-source PoR mechanism and Merkle Tree-based asset verification in 2020, then incorporated zk-SNARKs into its reserve-verification framework. As of October 18, 2026, it reported about $8.688 billion in total reserves and an overall reserve ratio of 118.49%. Those figures are separate from the PoSEC coverage calculation.
CoinDesk reported that Gate’s announcement followed a major Binance theft. Gate CEO Lin Han told the outlet that PoSEC complements PoR by showing how assets are stored. He also acknowledged that PoSEC does not verify internal passwords, private-key management, or access controls.
Those limits matter when interpreting the coverage figure. The ratio does not assess every part of exchange security, such as internal access controls. CoinDesk also noted a trade-off between securing assets in cold storage and enabling fast withdrawals. Gate’s PoSEC page adds a timing caveat: the comparison excludes price movements and fund flows between the snapshots.
Market reaction and crypto prices
The available reporting does not establish whether Gate’s PoSEC announcement affected crypto prices. CoinDesk reported that the announcement followed a major Binance theft, but that sequence does not show that one caused a market move. No supplied source attributes a price change to Gate’s disclosure.
The reported PoSEC ratio concerns Gate’s stated storage and user-asset figures; it does not measure market sentiment or predict asset prices.
For readers assessing the disclosure, the distinction is important: PoR addresses reserve adequacy, while Gate says PoSEC reports storage structure and a cold-storage coverage calculation. Neither figure by itself addresses all operational, access-control, or withdrawal risks identified in the available reporting.
What to watch next for Gate PoSEC
The next step is the independent review. Readers can look for its scope, the dates and methods used, and how the report explains the comparison between the two snapshots. Gate’s PoSEC page says the calculation excludes price movements and fund flows between them.
The ratio is not a live measure, and its underlying figures come from snapshots taken at different times. Gate has said the audit report will be published after the review is complete. Further disclosures could provide more detail about the calculation and verification process, but those details have not been established in the supplied evidence.
It will also be important to understand what PoSEC leaves out. As Lin Han told CoinDesk, it does not assess internal passwords, private-key management, or access controls. The announced audit review covers asset authenticity and control, valuation and calculation methodology, and the coverage calculation. Those checks do not remove every exchange, technology, or operational risk.
FAQ
What does Gate PoSEC measure?
Gate PoSEC reports how platform assets are divided between cold storage and hot wallets, then compares qualifying cold storage with user assets to estimate coverage in a severe hot-wallet loss scenario.
Has Gate’s 104.58% coverage figure been independently verified?
Not according to the information in Gate’s November 5 announcement. Gate said an independent third party was reviewing the assets and calculation, and that a report would follow completion.
Does Gate PoSEC show that customer assets are safe?
No. It is a disclosure and coverage metric, not proof against theft, access-control failures, operational problems, withdrawal delays, or market losses. The figure also depends on Gate’s methodology and snapshot timing.
Sources
- Gate Pioneers Proof of Security (PoSEC), Achieving 104.58% Cold Storage Coverage to Solidify Asset Security (www.gate.com)
- Proof of Cold Coverage | Gate Security (www.gate.com)
- Gate Introduces Proof Of Security Framework With 104.58% Cold Storage Coverage (BeInCrypto)
This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrencies are highly volatile; always do your own research before investing.
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