South Korean prosecutors have converted more than 320 Bitcoin recovered from a phishing-related security lapse into cash for the national treasury, closing a rare case where seized cryptocurrency was temporarily stolen before being returned.
The Gwangju District Prosecutors’ Office confirmed that it sold 320.8 Bitcoin at market prices, generating 31.59 billion Korean won (around $21.5 million), which has now been transferred to the government’s treasury.
검찰, 탈취 뒤 회수한 비트코인 320개 전량 매각
대략 315억원 상당 국고로 귀속 pic.twitter.com/XM0SAYtlFx— Changho BCH (@bch_changho) March 10, 2026
Authorities reportedly conducted the sale gradually to avoid sudden price movements in the cryptocurrency market. The Bitcoin was liquidated in smaller batches over an 11-day period between February 24 and March 6.
The digital assets were originally confiscated during an investigation into an illegal online gambling operation accused of processing roughly 390 billion won ($285 million) in bets between 2018 and 2021.
Phishing attack briefly removed seized Bitcoin from government custody
The case took an unusual turn when the seized cryptocurrency was temporarily lost due to a phishing attack during a custody transfer process.
According to reports, asset managers responsible for the funds were deceived by a fraudulent website, which allowed a hacker to gain access and transfer the Bitcoin to another wallet. Investigators were able to track the funds on the blockchain and quickly alerted domestic and international cryptocurrency exchanges, requesting them to freeze the hacker’s address to prevent liquidation.
The strategy worked. With the assets effectively trapped, the hacker later returned 320.88 Bitcoin on February 19, sending them back to a wallet controlled by the authorities.
Two days later, prosecutors confirmed the funds had been moved into a secure exchange account before initiating the staged liquidation.
South Korean courts reconsider crypto losses in debt restructuring
Meanwhile, South Korea’s judiciary is also reviewing how cryptocurrency losses are treated in personal debt rehabilitation cases.
Newly created rehabilitation courts in Daejeon, Daegu, and Gwangju are reportedly developing guidelines that would exclude losses from cryptocurrency and stock investments when calculating an individual’s liquidation value.
If implemented, the change would treat crypto losses similarly to ordinary asset declines rather than speculative liabilities.
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