Korean prosecutors make a mistake! Gwangju District Prosecutors' Office "loses" seized Bitcoin and is suspected of being targeted by a phishing attack

According to a report by Yonhap News Agency, the Gwangju District Prosecutors’ Office in South Korea recently discovered that a large amount of Bitcoin, which was seized during a criminal case and entrusted to the agency for safekeeping, has mysteriously gone missing during an internal asset inventory check. An official investigation has now been officially launched. The report mentions that the loss of these Bitcoins occurred around mid-2025. Investigators suspect that the prosecutors’ office may have inadvertently accessed a phishing scam website while conducting routine checks on seized assets, leading to the loss of the assets.

Since the case is still under investigation, authorities have not disclosed the actual amount of Bitcoin lost nor provided further details. However, an official revealed that there are rumors within the prosecutors’ office that the value of the lost Bitcoin is approximately 70 billion Korean Won (about $48 million). It is worth noting that the Gwangju District Prosecutors’ Office has previous experience handling large-scale cryptocurrency seizure cases. As early as March 2024, the office attempted to recover Bitcoin worth about 170 billion Korean Won (approximately $127 million) related to an illegal online gambling case. The recent news of asset loss has drawn significant public attention to the prosecutors’ ability to securely manage cryptocurrencies. The first concern from the public is whether the prosecutors’ seizure procedures comply with standard operating protocols. If only hardware devices containing wallet information were seized, without actually transferring the Bitcoin to a custody wallet controlled by the prosecutors, then the original holder could still access these assets if they possess the backup private key. Secondly, the environment in which the wallet was created is also crucial. If the prosecutors established a new custody wallet on an “online-connected computer,” the private key could have been exposed at the moment of generation. According to cybersecurity best practices, cryptocurrency wallets should be created on completely offline, isolated devices to prevent any external intrusion. Thirdly, the method of private key storage is equally important. Storing private keys on internet-connected devices or in cloud storage essentially opens the door to hackers. A more secure approach is to write the private key on paper and store it offline in a safe place.