South Korean authorities have come under intense scrutiny after a large stash of confiscated Bitcoin went missing during a routine inspection. The loss was discovered after authorities discovered that part of the wallet, which had been kept as crime evidence, was empty.
According to multiple reports, the value of the missing bitcoins is about 70 billion won, or about $47.7 million to $48 million.
How did authorities discover the theft?
The gap was reportedly discovered during a routine audit of confiscated digital assets by the Gwangju District Public Prosecutors Office.
An internal inspection flagged a transfer from the wallet that was marked as evidence, and investigators traced the movement to an external address. The office immediately launched an investigation to determine how access was lost and whether it could be restored.
Initial findings indicate that phishing scams are the trigger. According to local reports, a staff member accessed a fraudulent website masquerading as a legitimate service, and the interaction resulted in the disclosure of passwords and private keys.
Once the credentials are obtained, the Bitcoin is drained in an irreversible transaction.
Security revocation and USB storage
The report said some of the access details for the seized assets were stored on portable drives rather than in secure storage systems.
This practice appears to have made it easier for attackers to obtain keys after a phishing trap was set. When assets are bearer and the transfer is final, a simple mistake can cost millions of dollars.
The theft has raised tough questions about how state institutions handle cryptocurrencies. Some experts say the tools prosecutors used were better suited for private use than government-level detention.
They want stricter rules, multi-signature setups, and cold storage protocols that don’t rely on easily copied passwords.
Phishing scammers are stepping up their game. Image: Smarter Mortgages
track bitcoin
Blockchain records show that the funds moved through multiple wallets after the initial transfer. This public trail gives investigators clues, but tracing tokens to their final redemption point is often time-consuming and requires the cooperation of foreign exchanges and on-chain analytics companies. Officials are reportedly working with outside experts to map the flow.
What will the prosecutor do next?
Gwangju Prosecutors’ Office has vowed to conduct a thorough investigation, and authorities are attempting to reconstruct the incident step by step.
There are signs that this incident will begin a review of national procedures for preserving confiscated digital assets. Some lawmakers and legal experts are already calling for clearer standards and oversight.
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