South Korean Prosecutors Probe Missing Seized Bitcoin After Phishing Incident

Highlights:

• South Korean prosecutors have lost between $48 million and $68 million worth of BTC to a phishing attack.
• Officials confirmed that the incident occurred after mistakenly inputting the Bitcoin storage login details on a fake website.  
• Prosecutors have opened investigations into the incident as part of efforts to recover the stolen assets.    

Several local news outlets in South Korea have reported that the nation’s Gwangju District Prosecutor’s Office lost significant amounts of confiscated Bitcoin tokens. While officials have refused to release a detailed rundown of the incident, reputable sources disclosed that the stolen BTC tokens were worth 70 billion won ($48 million to $49 million). Other estimates suggest that the total loss could reach over 100 billion won ($68 million), depending on BTC’s price at the time of the exploit. 

Hackers Gain Access to the Bitcoin Storage Via a Phishing Attack

South Korean prosecutors discovered the exploit during one of their routine checks of seized assets. They regularly review passwords and access details for confiscated financial assets, including cryptocurrencies. However, in their most recent review, they found out that the Bitcoin tokens held in custody were no longer accessible. 

An official admitted that the incident most likely occurred after prosecutors mistakenly entered the login details on a fake website while checking the seized digital assets. This error allowed scammers to gain access to the wallet information stored on a USB drive.

He stated:

A different account confirmed that the password linked to the seized Bitcoin was stored on a removable storage device that was exposed due to a phishing attack. Prosecutors are currently investigating the incident to identify what went wrong to prevent future recurrence. They are also assessing the possibility of recovering all or part of the stolen assets. 

Assets Safety Concerns Grow as South Korea Prosecutors Lose $48M in Seized BTC

The incident has raised serious concerns about how law enforcement agencies store digital assets, especially as crypto-related crimes continue to rise. Earlier in January, South Korea’s Supreme Court ruled that Bitcoin on exchanges can be legally seized as part of investigation procedures. The court pronounced the verdict after a lower court seized 55.6 BTC, valued at approximately 600 million won ($413,000) from an account linked to Mr A. 

The confiscation was part of a money laundering probe. In response, Mr A argued that Bitcoin is not a physical entity. Hence, authorities have no right to seize the asset under Article 106 of the Criminal Procedure Act. He challenged the confiscation in South Korea’s Supreme Court. However, the higher court ruled that the seizure was legal.

The Supreme Court stated:

In related news, South Korean customs officials announced that they have nabbed a major international laundering ring. According to reports, this network has processed over $100 million through cryptocurrencies and local banks. The group has been operating since September 2021, before it was dismantled in June 2025. 

In other news, South Korean authorities have disclosed plans to reopen the nation’s digital assets market after banning corporate cryptocurrency investment for almost nine years. The new plan will permit companies and individual investors to allocate up to 5% of their equity to cryptocurrency investments.