|

Seized Crypto Stolen As South Korea’s Tax Authority Leaks Private Key

A chunk of paper ruined every thing. South Korea’s National Tax Service (NTS) printed an official press launch final Thursday meant to spotlight its crackdown on tax dodgers — and someplace within the course of, a full pockets seed phrase was photographed, printed, and despatched out to the general public with out anybody apparently noticing.

By the time somebody did, $4.8 million value of tokens had already walked out the door.

One Photo, One Mistake, Millions Gone

The press launch included a picture of a Ledger {hardware} pockets positioned subsequent to a handwritten sheet containing the pockets’s full mnemonic phrase — the string of phrases that features because the grasp key to any crypto pockets.

No blurring. No masking. Nothing. According to reports from Korean media shops together with Naver and Chosun, the discharge was a part of a broader NTS enforcement marketing campaign focusing on individuals who owed taxes, with seized crypto property proven as proof of the company’s work.

What was meant to showcase authorities motion as an alternative handed anybody with sharp eyes full entry to the funds inside.

Blockchain researchers who examined the pockets’s transaction historical past discovered three separate incoming transfers totaling 4 million PRTG (Pre-Retogeum) tokens, adopted by a single outgoing switch that swept your entire stability to a different deal with. Clean. Quick. Gone.

Researcher Says Actual Losses May Be Smaller Than They Appear

Associate professor Jaewoo Cho of Hansung University’s Blockchain Research Center confirmed the theft publicly on X, writing that the 4 million tokens — valued at roughly $4.8 million — had been taken immediately from the mnemonic phrase uncovered within the NTS launch.

He additionally examined different wallets whose seed phrases could have been seen in the identical picture and stated these didn’t seem to hold important danger.

Cho added that as a result of PRTG tokens are arduous to transform into money, the true monetary injury might be far smaller than the headline quantity suggests. He expressed hope that the incident would push South Korean authorities companies to lastly construct correct programs for holding seized crypto property.

The NTS has not issued a public response to the incident as of this writing.

A Pattern Of Custody Problems In South Korea

What makes this story more durable to disregard is that it didn’t occur in isolation. Reports say South Korean police individually found in February 2026 that 22 Bitcoin seized throughout a 2021 hacking case had gone lacking from a chilly pockets stored inside a Gangnam police station vault.

Two suspects had been arrested after investigators decided the cash had been moved utilizing a mnemonic phrase that authorities had by no means held management over.

The cash, value roughly $1.4 million, are gone.

Featured picture from Unsplash, chart from TradingView

Similar Posts