South Korea Investigates Loss of Bitcoin Seized in 2021 Criminal Case

TLDR

• South Korean authorities confirmed the loss of 22 Bitcoins worth $1.5 million seized in 2021.
• The Bitcoin was stored in a USB cold wallet, but the digital keys were accessed without authorization.
• The Gangnam Police Station maintained possession of the physical wallet, but the cryptocurrency was moved.
• The missing Bitcoin was discovered during a nationwide review of how investigative agencies handle digital assets.
• The Gyeonggi Northern Provincial Police Agency has launched an investigation to determine the cause of the leak.

South Korean authorities have confirmed the loss of 22 Bitcoins, worth about $1.5 million, seized during a 2021 investigation. The coins were stored in a cold wallet, which was later found to have been tampered with. This incident follows a similar case involving the loss of 320 Bitcoins from another law enforcement agency.

Gangnam Police Station Reports Missing Bitcoin

The 22 Bitcoins were voluntarily surrendered by suspects in November 2021 as part of an investigation. The coins were kept in a USB cold wallet, a device used to store cryptocurrency securely offline. During a recent internal review, it was found that the coins were transferred out of the wallet without authorization.

The physical USB wallet remained in the possession of Gangnam Police, with no signs of theft or tampering. However, the digital keys to the wallet were accessed, leading to the unauthorized transfer of the bitcoins. Authorities confirmed the leak was discovered during a nationwide inspection of investigative agencies’ handling of virtual assets.

South Korea Gyeonggi Northern Police Launch Investigation

In response to the incident, the Gyeonggi Bukbu Provincial Police Agency has initiated an internal investigation. They are focused on determining how the Bitcoin was moved without permission and whether any officers were involved. The investigation also includes a review of the police station’s wallet key management and access logs.

The agency has not publicly accused any personnel of criminal involvement, but they continue to analyze digital records. The authorities have not revealed whether any of the missing Bitcoin have been recovered or traced. Investigators are also reviewing blockchain transactions to track the coins’ movements.

This case adds to growing concerns about the handling of digital assets by South Korean law enforcement. The country has faced increasing scrutiny over how police and prosecutors secure cryptocurrency seized in criminal cases.

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