South Korean Prosecutors Sell $21.5M in Bitcoin Seized From Phishing Case

TL;DR:

• The Gwangju District Attorney’s Office in South Korea sold 320.8 confiscated Bitcoin and transferred the equivalent of $21.5 million to the national treasury.
• The assets had been stolen in August 2025 through a phishing attack on the officials who held them in custody, and were recovered when the hacker returned them.
• Other recent security failures were recorded at South Korean agencies, including the loss of 22 Bitcoins from a cold wallet and the public exposure of a recovery phrase.

The Gwangju District Attorney’s Office, in South Korea, sold 320.8Bitcoin and transferred 31.6 billion Korean won —equivalent to $21.5 million— to the national treasury. The funds corresponded to assets originally seized during an operation against an international illegal gambling platform that operated between 2018 and 2021, whose operators had concealed their illicit proceeds by converting them into cryptocurrencies.

The case, however, took an unusual turn before reaching that resolution. In August 2025, the officials in charge of custodying the assets fell into a phishing trap and lost the 320.8 BTC. The exploit went undetected until December of that same year. The situation escalated further when, last month, the perpetrator of the theft returned the funds to the wallet under the authorities’ control.

Prosecutors noted that, prior to the return, they blocked the wallet’s access to various liquidation channels. According to the newspaper Chosun Ilbo, the sale was carried out in batches over 11 days, between February 24 and March 6. The perpetrator of the attack remains at large and the investigation remains open.

The incident in Gwangju is not an isolated case. A nationwide internal audit revealed that the Gangnam Police Station, in Seoul, had misplaced 22 Bitcoins stored on a cold wallet USB drive since 2021. Police authorities are investigating the possibility of internal involvement, given that the physical device was never removed.

Adding to this is an error by the National Tax Service, which inadvertently exposed a wallet recovery phrase in a public report. Following the disclosure, 4 million Pre-Retogeum (PRTG) tokens, theoretically valued at $4.8 million, were transferred from that wallet to an unidentified address.

The succession of these episodes made it abundantly clear that there is a lack of standardized digital security protocols and sufficient technical training among the country’s law enforcement agencies and tax authorities. The management of assets such as Bitcoin poses specific challenges that existing institutional frameworks do not yet appear to be equipped to handle.