South Korean Police Lose $1.4 Million in Seized Bitcoin; Two Suspects Arrested

Bithumb, South Korea’s second-largest cryptocurrency exchange, planned to distribute a combined 620,000 won to 249 winners in a promotion on Feb. 6, 2026. An employee mistakenly entered BTC instead of KRW as the currency, crediting accounts with 620,000 Bitcoin worth more than $40 billion on paper. The incident highlighted risks involving centralized exchanges’ internal ledgers, asset reserves and controls over manual processes.

Bithumb recovered 99.7% of the mistakenly credited assets that day and used company reserves to cover the 1,788 BTC that had already been sold. After pursuing recipients individually, it reduced the outstanding amount from about 12.3 billion won ($8.3 million) to 7 Bitcoin. On April 9, 2026, the company confirmed that it had petitioned a South Korean court for a provisional asset freeze against those refusing to return the funds, with civil lawsuits expected to follow.

Bitcoin held by South Korea’s Gwangju District Prosecutors’ Office was stolen after the civil servant handling it fell victim to a phishing attack, exposing gaps in the government’s digital-asset custody, account permissions and cybersecurity training. Coming amid the disappearance of digital assets at other public agencies, the case fueled public concern over the government’s technical competence and internal controls.

The Gwangju District Prosecutors’ Office later recovered all 320.8 stolen bitcoin and sold them between late February and early March, generating about $21.5 million that was remitted to the national treasury. Although the swift sale reduced the risk of another theft, the custody failure and recovery process remain under public scrutiny.