Quick Breakdown
- South Korean prosecutors are investigating the loss of $47.7M in seized Bitcoin during an internal audit
- Officials suspect a phishing attack exposed wallet credentials via a compromised employee
- The case raises global concerns over how law enforcement secures confiscated crypto assets
Authorities in South Korea have opened an internal investigation after discovering that tens of millions of dollars’ worth of Bitcoin seized in a criminal case had gone missing.
JUST IN: 🇰🇷 South Korean prosecutors search for “lost” Bitcoin
– Prosecutors say a “significant” amount of BTC was lost while in state custody
– Loss likely occurred mid-2025, possibly via phishing
– Authorities refuse to disclose how much Bitcoin is missing pic.twitter.com/BexowaFnlX— Bitcoin Archive (@BitcoinArchive) January 22, 2026
Officials at the Gwangju District Prosecutors’ Office uncovered the disappearance during a routine inspection of confiscated financial assets, local media reported Thursday. Roughly 70 billion won ($47.7 million) in Bitcoin was found to be unaccounted for, triggering an urgent probe into how the funds were accessed and transferred.
Phishing attack blamed for security breach
According to a report by The Chosun Daily, the stolen Bitcoin was linked to a leaked wallet password. Prosecutors believe the breach stemmed from a phishing attack after an employee allegedly accessed a fraudulent website masquerading as a legitimate service.
Phishing remains one of the most common threats in crypto, with attackers impersonating trusted platforms to trick users into revealing private keys or credentials. While the risk persists, the blockchain security firm Scam Sniffer recently reported a sharp decline in phishing-related losses, noting an 80% drop in stolen funds and a significant drop in victims so far in 2025.
Global law enforcement faces crypto custody risks
The incident highlights growing concerns around how law enforcement agencies store and manage seized digital assets, especially as governments worldwide accumulate large crypto holdings without publicly disclosing custody safeguards.
South Korea’s case comes just days after customs officials dismantled a major crypto laundering operation. Elsewhere, Coinbase revealed last year that it assisted the United States Secret Service in recovering $225 million in stolen crypto. The exchange provided crucial on-chain analytics and subpoena record support, which ultimately helped agents trace illicit transactions and identify over 130 Coinbase users who unknowingly sent cryptocurrency to scam wallets, representing at least $2.3 million in losses.
In the UK, authorities have also debated whether to retain billions of dollars’ worth of seized Bitcoin rather than return funds to fraud victims.
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