Beyond Cold Storage: Why Hardware Wallets Need Open Source and Clear Signing
For years, hardware wallets have been treated as the gold standard for protecting cryptocurrency. By keeping private keys off internet-connected devices, they shut out a whole class of threats, from malware to phishing. But recent attacks have exposed a gap in that model: a well-protected key offers little defense if the person using it can’t tell what they are signing.
The Bybit hack in February 2025 made that painfully clear. North Korea’s Lazarus Group compromised a developer’s machine at Safe{Wallet}, the multisig platform Bybit used to manage its Ethereum cold wallet, and injected malicious code into the signing interface.
Bybit’s signers saw what looked like a routine transfer. What their hardware wallets actually signed was a change to the wallet’s underlying logic that handed control to the attackers. Roughly $1.5 billion in ETH was stolen, the largest crypto theft on record at the time.
The keys were never extracted....
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