arXiv:2610.25916v2 Announce Type: replace Abstract: As coding models and agent harnesses become more capable, reliable security verification is becoming a central bottleneck. Improving secure code generation requires a signal whose reported progress remains aligned with actual program behavior under optimization; otherwise, an optimizer can improve the signal's verdict without removing the underlying vulnerability. Existing model-based approaches require models to either infer program behavior from source code or specify correct outcomes for adversarial tests, placing substantial reasoning demands on the security signal. We introduce \falcon{}, a counterexample-grounded verification framework that separates attack exploration from behavioral verification and connects them through execution traces of the program under test. In test-time repair, \falcon{} yields substantially stronger held-out functional-security gains than alternative security signals across secure code generation benchmarks, while preserving or improving functionality. As an RL reward, \falcon{} also outperforms static-analysis and learned rewards on held-out functional-security, even when all policies successfully optimize their respective training rewards. Combining \falcon{} with either proxy reward further improves held-out performance, suggesting that execution-grounded feedback can mitigate reward overoptimization while preserving useful guidance from existing security signals.