South Korean Prosecutors Recover Stolen Bitcoin, Send $21.5 Million in Proceeds to Treasury
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.
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The history behind this eventSouth Korean Police Lose $1.4 Million in Seized Bitcoin; Two Suspects Arrested
In 2021, South Korea’s Gyeonggi Northern Provincial Police Agency seized 22 Bitcoin while investigating the hacking of a cryptocurrency exchange and placed them in a cold wallet managed by a third party. Police breached rules governing seized assets and did not possess the wallet’s seed phrase, creating significant risks for the custody and recovery of the evidence.
South Korean police recently confirmed that the 22 Bitcoin had been stolen, with related reports valuing them at about $1.4 million. The Gyeonggi Northern Provincial Police Agency has arrested two suspects and is investigating when and how the assets were transferred and where the funds went. It is also working to determine responsibility for the third-party management and internal custody of the assets.
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