The Bybit Breach: A Wake-Up Call for Wallet Security

In the fast-evolving world of crypto security, even the most widely trusted infrastructures can fall victim to sophisticated attacks. The recent breach at Bybit, which resulted in the theft of $1.5 billion worth of assets, has once again exposed the risks lurking in multi-signature wallet architectures. According to a public announcement from Safe{Wallet}, the attack was traced back to a compromised front-end that injected malicious JavaScript, allowing hackers to manipulate user transactions.

Understandably, this has sent waves of concern throughout the Safe{Wallet} community. With attackers constantly innovating, crypto users and institutions alike are asking the same critical question: How can we better protect our assets?

Cobo Portal: A Holistic Security Solution for Safe{Wallet} Users

The answer lies in multi-layered security defenses—a principle that Cobo Portal, Cobo’s all-in-one digital asset management platform, was built upon.

Within Cobo Portal, users can access three key security solutions tailored to protect Safe{Wallet} users at different stages of the transaction lifecycle:

• Cobo's Safe{Wallet} Co-Signer – An off-chain, independent multi-signature co-signer that acts as an extra layer of verification, preventing malicious transactions before they’re signed.

• Cobo Safe – An on-chain smart contract-based access control solution, designed to enforce strict wallet permissions and limit the impact of potential breaches.

• Safe Guard – A specialized security module for Safe{Wallet} smart contracts, designed to block high-risk operations such as Delegate Calls, unauthorized contract modifications, and gas fee exploits.

By implementing these multi-layered defenses, Cobo Portal provides an end-to-end security framework that could have prevented the Bybit attack before it even escalated.

How Cobo Portal Safeguards Safe{Wallet} Users

Security in crypto is never about a single layer of defense. Attackers exploit vulnerabilities at different stages of a transaction’s lifecycle, meaning a robust security framework must account for risks before, during, and after a transaction is signed and executed.

Cobo’s security strategy is designed to cover this entire transaction journey—offering pre-signature risk control, post-signature governance protections, and independent security verification layers.

Let’s break this down.

1. Off-Chain Protection: Stopping Malicious Transactions Before They Execute

One of the most effective ways to prevent attacks is to intercept suspicious transactions before they’re signed and broadcast to the blockchain.

Cobo enhances Safe{Wallet}’s multi-signature model by introducing an independent Safe{Wallet} co-signer, adding an extra layer of verification and risk assessment.

Cobo Safe{Wallet} Co-Signer: A Crucial Third-Party Security Layer

By allowing Cobo to act as one of the signers in a Safe{Wallet} multi-signature setup, institutions gain an additional independent review before transactions go through. 

This enhancement brings several key security advantages:

• Enterprise-Grade MPC and HSM-Based Signing

  • Unlike traditional Safe{Wallet} signers that rely on a unified infrastructure, Cobo’s co-signer operates on a completely separate signing pathway, reducing the risk of coordinated breaches occurring.

• Customizable Risk Control Policies

  • Organizations can enforce tailored security rules, such as:

    • Whitelists and blacklists for smart contract interactions

    • Limits on transaction amounts and recipient addresses

    • Parameter validation to prevent unauthorized contract modifications

• Dedicated Security Infrastructure

  • Cobo provides:

    • Independent blockchain RPC nodes to prevent data manipulation

    • Secure transaction parsing services to analyze raw blockchain data

    • A separate transaction approval app, ensuring cross-verification

💡 How This Would Have Stopped the Bybit Attack:Had Bybit integrated Cobo Safe{Wallet} Co-Signer within their processes, any unauthorized transaction—resulting from the compromised front-end—would have been flagged during the pre-signing risk control check. 

Even if the attacker attempted to push the transaction through, Cobo’s independent approval app would have clearly displayed the actual transaction details, preventing users from unknowingly approving a transaction.

2. On-Chain Protection: Smart Contract-Level Security Reinforcements

Even with off-chain controls, attackers can still attempt to exploit smart contract vulnerabilities to escalate privileges, bypass governance controls, or drain funds. 

This is where Cobo’s on-chain security solutions would come into play.

🔐 Cobo Safe: Strengthening Smart Contract Access Controls

Cobo Safe is a battle-tested smart contract solution that allows Safe{Wallet} users to separate and limit permissions across multiple wallet addresses.

For example, in a centralized exchange scenario such as Bybit’s, cold wallets primarily exist to transfer funds to hot wallets when needed. 

Cobo Safe enhances this security model by:

1. Delegating Low-Risk Permissions to Secondary Addresses

   • Instead of requiring multi-signature approvals for every minor transfer, exchanges can authorize specific low-risk addresses to initiate transfers only to designated hot wallets.

   • This way, even if an attacker compromises this secondary address, they cannot drain the cold wallet or reroute funds to an external account.

2. Restricting Unauthorized Smart Contract Upgrades

   • Many recent wallet exploits involve malicious contract upgrades, where attackers insert backdoors to manipulate transaction logic.

   • Cobo Safe allows users to explicitly prohibit unauthorized modifications to Safe{Wallet} settings—ensuring that no one (not even Safe{Wallet}’s own signers) can tamper with wallet configurations without prior multi-signature approval.

💡 How This Would Have Stopped the Bybit Attack:The attacker in the Bybit breach likely manipulated smart contract execution flows to approve unauthorized transactions. With Cobo Safe’s permission restrictions, the attacker would have been blocked from modifying wallet governance rules even if the front-end was compromised. 

Introducing Safe Guard: An Extra Layer of Smart Contract Defense

To further enhance on-chain security, Cobo has developed Safe Guard, an open-source smart contract module designed to act as a firewall for Safe{Wallet} transactions.

Key  Features of Safe Guard

• Blocks Delegate Calls – Prevents contract manipulations that would allow attackers to modify Safe{Wallet}’s governance rules.

• Disables Safe{Wallet}’s Gas Sponsorship Feature – Eliminates vulnerabilities where attackers exploit gas fee mechanisms to drain assets.

• Prevents Self-Modifications – Ensures that Safe{Wallet} signers’ contracts cannot modify their own permissions without external approvals.

• Whitelists Executors – Ensures that only authorized entities can execute transactions on behalf of Safe{Wallet} signers.

💡 How This Would Have Stopped the Bybit Attack:The Bybit hacker leveraged Delegate Calls to manipulate Safe{Wallet}’s execution environment. With Safe Guard enabled, these malicious contract interactions would have been blocked at the contract level.

⚠ Important Note: Safe Guard is currently in open-source concept mode and has not yet undergone a full security audit. Users should wait for official releases before deploying in production environments.

A Future-Proof Security Framework for Safe{Wallet} Users

Cobo Portal is continuously innovating to strengthen institutional wallet security. As part of its long-term security roadmap, Cobo is working to:

• Integrate Safe Guard with Cobo Safe for seamless, contract-level security enforcement.

• Expand custom risk control settings, allowing users to define specific contract interaction rules and transaction validation parameters.

• Develop multi-layer security enhancements, ensuring a frictionless blend of off-chain risk control and on-chain policy enforcement.

Final Thoughts: Proactive Security is the Only Security

The Bybit incident serves as a powerful reminder that wallet security cannot be an afterthought. As attacks become more sophisticated and multi-faceted, the only way to stay ahead is by adopting a multi-layered security framework.

🔎 Looking to enhance your Safe{Wallet} security?
📩 Get in touch with Cobo’s security team today!

By integrating Safe{Wallet} Co-Signer, Cobo Safe, Safe Guard, and robust smart contract security, institutions can proactively mitigate risks, enforce compliance, and protect assets—before an attack happens.

References

📌 Safe{Wallet} Announcement: Safe X Tweet
📌 Cobo's Safe{Wallet} Co-Signer Solution: Learn More
📌 Cobo Safe Smart Contract Code: GitHub Repository
📌 Safe Guard Open-Source Contract: Explore Code