As crypto adoption expands, so do the attack vectors targeting digital assets. Recent breaches have exposed a critical security gap: multi-sig alone does not prevent signers from approving fraudulent transactions.

Recent reports highlight a shift in tactics by attackers toward social engineering and UI manipulation in the crypto space. The Elliptic Typologies Report 2024 notes the increasing use of AI in cryptoasset crimes, particularly in fraud and ransomware. While specific year-over-year increases in fraud and deception-based thefts are not detailed, the trend toward more sophisticated social engineering tactics is evident.

The Bybit hack ($1.5 billion stolen in 2025) is a prime example. Instead of bypassing cryptographic protections, attackers manipulated what signers saw, tricking them into approving a malicious transaction under the assumption it was legitimate. This incident follows a broader trend—recent attacks on digital asset custodians have shown that UI-based deception is an emerging threat vector, affecting both exchanges and institutional wallets.

The 2024 WazirX breach ($235 million loss) and the Radiant Capital multi-sig exploit ($50 million loss) further illustrate this trend. In both cases, attackers compromised transaction interfaces, leading signers to approve unauthorized transfers without realizing the true nature of the transactions. These incidents demonstrate that security risks no longer stem solely from private key theft but also from manipulated perception—where victims believe they are approving a legitimate transaction when they are not.

This breach highlights a fundamental issue: signers rely on the accuracy of their transaction interface—but if that interface is compromised, the entire security model collapses.

Why Multi-Sig is Vulnerable to UI Manipulation

Traditional multi-sig assumes signers operate in a secure and uncompromised environment. The Bybit attack shattered this assumption.

How the Attack Happened

Compromised UI Display

Attackers injected malicious JavaScript into the Safe{Wallet} user interface, displaying false transaction details while pushing an unauthorized transfer.

Blind Signing on Hardware Wallets

Many hardware wallets fail to properly display transaction details, forcing signers to rely on a potentially manipulated UI. In Bybit’s case, this led to signers unknowingly approving an attacker’s transaction.

No Independent Verification Layer

Without an external, independent validation system, there was no way to detect and block the fraudulent transaction before execution.

This attack wasn’t a failure of cryptographic security—it was a failure of independent transaction verification.

Independent Verification: The Missing Layer in Crypto Custody

To prevent similar attacks, exchanges and institutions must go beyond trust-based security models. Independent verification is now a necessity.

How Cobo Safe{Wallet} Co-Signer Enhances Security

1. Off-Chain Transaction Verification

Cobo’s co-signer fetches transaction details directly from the blockchain rather than relying on UI-generated data.

Prevents attackers from altering transaction details within the signing interface.

Ensures signers verify the actual transaction data rather than manipulated on-screen information.

2. Multi-Layer Risk Analysis

Each transaction undergoes automated analysis based on security policies:

Whitelists and blacklists to prevent unauthorized transfers.

Smart contract interaction controls to stop malicious contract upgrades.

Anomaly detection to flag suspicious transaction behavior.

If a transaction falls outside pre-approved parameters, the co-signer blocks execution.

3. Independent Signing Infrastructure

Unlike traditional multi-sig, where all signers operate within the same environment, Cobo Safe{Wallet} Co-Signer functions as a separate, isolated signing entity.

Even if one signer is compromised, the co-signer remains secure.

Reduces systemic risk by decentralizing transaction approval.

4. Transparent Auditability

Every transaction is logged, reviewed, and independently verified for full traceability.

Exchanges gain full visibility into the approval process.

Provides an additional checkpoint before execution, mitigating unauthorized transfers.

The Future of Crypto Custody Security

The Bybit breach is a wake-up call: future attacks will not target cryptographic weaknesses but human and process vulnerabilities.

Independent verification must become a fundamental security layer for institutions managing digital assets. Multi-sig security can only remain viable if paired with external validation mechanisms.

Adopting a New Standard in Custody Security

The Bybit attack proves that relying solely on UI-dependent approvals is no longer sustainable. Security must evolve beyond assumptions and embrace multi-layered verification mechanisms.

The future of digital asset security isn’t about trusting multi-sig alone—it’s about verifying every transaction independently.

For institutions securing high-value assets, independent verification isn’t just an enhancement—it’s a requirement.

Strengthen Your Security With Cobo Safe{Wallet} Co-Signer

The next evolution in custody security is here.

Contact Cobo to explore how independent verification can enhance your security framework—and take advantage of our 30-day trial to experience it risk-free.