Gate’s Proof of Security (PoSEC) is a disclosure of whether qualifying cold-storage assets could cover all user assets if every hot-wallet asset were lost. It matters because reserve sufficiency and the way assets are stored answer different questions. Gate reported 104.58% coverage for its snapshot at 00:00 UTC on Nov. 4, 2026; its comparison used cold-storage and user-asset shares from different snapshots, and Gate said independent third-party verification was in progress. Gate’s PoSEC methodology describes the calculation and its scope.
Treat 104.58% as a measure of coverage in a specific hot-wallet-loss scenario, not as a score for every security control.
What Gate’s Proof of Security measures
Gate calculates PoSEC as cold-storage assets divided by user assets. Under Gate’s definition, a result of at least 100% means qualifying cold-storage assets equal or exceed the total owed to users in the scenario where all hot-wallet assets are lost.
The 100% mark is the coverage threshold: at that level, the reported cold-storage amount matches the user-asset amount. A figure above it indicates a higher reported ratio under this calculation.
What Gate’s 104.58% figure compares
For its Nov. 4 snapshot, Gate reported that cold storage accounted for 88.26% of its storage structure and hot wallets for 11.74%. The user-asset share used in the coverage comparison was 84.39%, drawn from a separate Proof of Reserves (PoR) snapshot.
Gate compares those shares, rather than matching the absolute value of cold-storage assets against user liabilities at one moment. It says price changes and fund movements between the snapshots are not reflected in the comparison. The 104.58% is therefore Gate’s reported share-based ratio for that snapshot, not a same-time reconciliation of wallet balances.
A Nov. 5 report connected Gate’s public introduction of PoSEC to the debate after a Binance-related hack. NeoTeo previously covered the reported Binance attack timeline, while CoinDesk’s account attributed PoSEC’s stated limits to Gate founder and CEO Lin Han.
Which assets Gate counts as cold storage
Gate’s criteria cover assets that are not used directly for routine deposits and withdrawals, are kept offline or with an independent custodian, require approval from multiple parties to transfer, and can be verified for ownership, balance and valuation.
That definition can include qualifying stocks and U.S. Treasuries held by independent custodians. Those traditional assets are off-chain holdings, not cryptocurrency in blockchain cold wallets, and may not appear in on-chain balances. So the reported cold-storage share is not necessarily a share made up solely of crypto assets visible at wallet addresses.
How PoSEC differs from Proof of Reserves
Gate describes PoR and PoSEC as addressing separate questions:
| Disclosure | Question it addresses | Method Gate describes |
| Proof of Reserves (PoR) | Are reserves sufficient to cover user assets, and is a user’s balance included in the Merkle tree? | Gate describes using a Merkle tree and zk-SNARKs; users can check balance inclusion and reserve sufficiency. |
| Proof of Security (PoSEC) | Could qualifying cold-storage assets cover user assets if all hot-wallet assets were lost? | A cold-storage coverage ratio, with independent third-party verification. Gate said verification was in progress. |
Gate said its verification covers asset authenticity and control, valuation and reporting basis, and the coverage calculation. It said it would publish the report after the review was complete.
Lin Han told CoinDesk that PoSEC does not verify internal passwords, private-key management or access controls. The ratio addresses the specified cold-storage coverage scenario; it does not evaluate those controls. Han also said the framework does not remove the trade-off between security and fast withdrawals.
