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The Gwangju District Prosecutor’s Office in South Korea lost a large amount of Bitcoin seized during a criminal investigation, according to several local media reports on January 22.
The case highlights a critical gap in the way law enforcement agencies handle the seizure of digital assets.
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A phishing attack is suspected
Check out the prosecutor’s office year recently That the Bitcoin held in custody is gone. The loss is believed to have occurred around mid-2025. Investigators suspect the office fell victim to a phishing attack after accidentally entering a scam website during a routine inspection of seized assets.
Prosecutors declined to confirm the exact amount he lost. However, sources indicate that the number may reach tens of millions of dollars. A prosecution official told local media that internal estimates put the loss at about 70 billion won ($48 million).
“We are conducting an investigation to trace the circumstances of the loss and the location of the assets,” said a prosecution official, declining to provide further details.
Questions about cryptocurrency custody protocols
The incident raises fundamental questions about how law enforcement agencies deal with each other Confiscated digital currencies.
The first concern is whether prosecutors followed proper forfeiture procedures. If prosecutors confiscate only a USB device containing the wallet information without transferring the bitcoin to a separate wallet, the original owner may be able to withdraw the assets using a backup private key stored elsewhere. In such cases, the expropriation will be incomplete from the beginning.
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The portfolio creation environment is also important. If a new custodial wallet is created on a computer connected to the Internet, the private keys ​​can be exposed from the moment of creation. Standard security practice requires that wallets be installed in an open environment, completely isolated from any network connection.
Storage of private keys is another vulnerability. Keeping keys on network-connected devices or cloud storage creates significant hacking risks. The correct approach involves recording keys on physical media, such as paper, and storing them in a completely separate location from the Internet.
Access control is equally important. Private keys can be copied in seconds if someone accesses them even briefly. The fact that officials accessed the scam site during a routine scan suggests lapses in internal security training and access management protocols.
Broader implications for law enforcement
This case highlights a growing challenge facing us Worldwide authority. As cryptocurrencies become increasingly involved in criminal cases, law enforcement agencies must develop robust custody solutions that meet security standards for the assets they manage.
Traditional evidence storage protocols do not translate directly into digital assets. Unlike physical evidence locked in a safe room, cryptocurrencies require active security measures to prevent unauthorized transfers.
Korea’s Public Prosecutor’s Office has not revealed whether it follows approved cryptocurrency custody guidelines or what security measures are in place. The ongoing investigation may uncover systemic lapses beyond this single incident.
For now, this case is a cautionary example of what can happen when traditional institutions handle unconventional assets without adequate preparation.
