South Korean prosecutors investigate disappearance of seized Bitcoin following phishing attack

The Gwangju District Prosecutors’ Office is investigating the disappearance of Bitcoin seized from government custody.

Summary

• Multiple Bitcoins went missing in mid-2025 after private key credentials were exposed in a phishing attack, resulting in irreversible transfers.
• Media and internal sources put the value at roughly $48–49 million, though authorities have not confirmed exact amounts.
• The incident raises concerns about government cryptocurrency custody practices and comes amid South Korea’s expanding legal framework treating digital assets as seizable property.

Multiple Bitcoins reportedly went missing during the prosecutors’ storage and management process, with the incident believed to have occurred in mid-2025, according to internal reviews. Preliminary findings indicate a phishing attack as the cause, rather than an external hack of state systems, the reports stated.

Officials reportedly stored private key passwords on a portable USB device. During a routine inspection, an employee accessed a fraudulent website, which resulted in the credentials being exposed to third parties, according to the findings. The Bitcoin was transferred irreversibly once the private keys were compromised, leaving no technical path for recovery.

Authorities have not officially disclosed the exact quantity of Bitcoin involved. Local media and internal sources estimate the losses at tens of billions of won, potentially equivalent to approximately $48 million to $49 million.

The Gwangju District Prosecutors’ Office confirmed that an internal investigation is underway but declined to comment on the precise valuation or operational details, citing the ongoing nature of the probe. No public information has been released regarding disciplinary action or changes to custody procedures.

On Jan. 8, 2026, the Supreme Court of South Korea issued a ruling confirming that Bitcoin held on centralized exchanges such as Upbit and Bithumb qualifies as “seizable property” under the Criminal Procedure Act. The decision built on earlier precedents from 2018 and 2021, which recognized cryptocurrency as intangible property with economic value, expanding the state’s authority to confiscate digital assets in criminal cases.

The incident has prompted questions about government agencies’ technical preparedness to manage digital property. Cryptocurrency custody requires operational security, specialized key management, and isolation from everyday computing environments, according to industry standards.

The case highlights challenges facing South Korea’s digital asset legal framework as the country continues to formalize its approach to cryptocurrency enforcement.