TL;DR
- BTC Recovery: South Korean Prosecutors retrieved $21.4M in Bitcoin after a hacker returned 320.8 BTC following a phishing‑enabled theft.
- Security Response: Authorities moved the recovered funds to a local exchange and continued efforts to identify the hacker and secure seized digital assets.
- Wider Failures: A nationwide review began after another police unit lost 22 BTC, prompting internal probes into asset mismanagement and potential internal involvement.
South Korean prosecutors are working to restore confidence in their digital asset management practices after recovering $21.4 million in Bitcoin that vanished from government custody last year. The Gwangju District Prosecutors’ Office disclosed that the funds, originally seized from a gambling platform, were lost following an internal phishing incident that exposed recovery seed phrases and enabled a hacker to drain the wallet in August.
Hacker Returns 320.8 BTC After Authorities Block Liquidation Attempts
Local outlet Digital Asset reported that the hacker unexpectedly returned 320.8 BTC to the authorities’ wallet on Tuesday. Prosecutors said they had already blocked centralized exchange transactions linked to the hacker’s address, making it difficult for the individual to convert the stolen Bitcoin into cash. While the return of funds marks a significant breakthrough, officials emphasized that the hacker’s identity remains unknown and the investigation is still active.
Following the recovery, prosecutors transferred the returned Bitcoin to a local exchange to ensure more secure storage. Officials noted that the move is part of a broader effort to prevent similar incidents and to maintain tighter oversight of seized digital assets. The office confirmed that investigators will continue tracing blockchain activity to identify the person responsible for the breach and determine whether additional vulnerabilities remain.
SOuth Korea Authorities Initiated a Review on Multiple Asset Mismanagement Cases
The phishing‑related breach has prompted a nationwide review in South Korea of how investigative agencies handle confiscated crypto. The scrutiny intensified after it emerged that the Seoul Gangnam Police Station had also lost track of 22 BTC stored in a cold wallet since 2021. The revelation raised concerns about inconsistent security standards and the lack of unified protocols for managing digital evidence across jurisdictions.
In response to the growing controversy, the Gyeonggi Bukbu Provincial Police Agency confirmed to news outlets that it has opened an internal investigation to determine how the 22 BTC went missing and whether internal involvement played a role. South Korean Authorities said the probe aims to clarify the circumstances of the leak and strengthen oversight mechanisms to prevent future losses.
