South Korea’s Seized Bitcoin Vanishes in Major Phishing Heist – Prosecutors Probe $300M Loss
The prosecutors of South Korea are wanting into the lack of a considerable sum of Bitcoin, which had been confiscated as felony funds following an inside audit exhibiting that the funds could have disappeared in the course of the time in the custody of the state.
The case, believed by authorities to be a phishing assault, is now coming to lift new questions over the storage and safety of confiscated digital belongings, because the nation continues to increase its authorized and regulatory jurisdiction over crypto markets.
A report released by the Yonhap News on Thursday mentioned that the Gwangju District Prosecutors’ Office lately verified {that a} substantial quantity of Bitcoin that was acquired throughout a earlier felony case is not recorded.
Prosecutors suspect that the loss had taken place in the center of final yr, when it was saved and managed.
Phishing has been cited because the most probably trigger, although officers declined to reveal the precise quantity lacking or its present valuation, citing the continuing probe.
Seized Bitcoin Lost After Wallet Password Exposure, Officials Say
An official on the prosecutor’s workplace acknowledged that the investigators are striving to determine the places of the seized properties, however they might not confirm any extra info in the meanwhile.
Local information states that the bitcoin was linked to an unlawful playing state of affairs and that it was being seized as an unlawful piece of property when it was misplaced.
The estimates reported in the home media point out that the worth could be in tens of billions of received, which might translate to a number of million {dollars}, however these numbers haven’t been verified by prosecutors.
The early proof signifies that the bitcoin was saved in a conveyable USB, versus a extra sturdy custody system.
The pockets password was additionally reported to have been revealed to a third party throughout an everyday examination of confiscated gadgets, which offered a chance to illegally entry it and switch cash.
@KoinlyOfficial warns a third-party breach could have uncovered consumer emails however stresses that no pockets, transaction, tax, or portfolio information was shared with Mixpanel.#CryptoSecurity #CryptoTax #Koinlyhttps://t.co/ASDxMchfyg
— Cryptonews.com (@cryptonews) December 23, 2025
The case is likely one of the most up-to-date high-profile circumstances of stolen cryptocurrency being re-stolen by regulation enforcement through social engineering as a substitute of technical deserves.
Phishing assaults are misleading, not technical, as they benefit from a trusting occasion. In a extra institutionalized setting, they normally prosper via human error and poor inside controls versus blockchain weaknesses.
The Gwangju District Prosecutors’ Office isn’t any stranger to massive crypto seizure circumstances. In March 2024, it pursued the restoration of roughly 170 billion received, or about $127 million on the time, in Bitcoin linked to a different unlawful playing operation.
The seizure of digital belongings has been regularly institutionalized in South Korea in latest years after a number of landmark Supreme Court choices made it clear that cryptocurrencies can be regulated as property under the Criminal Procedure Act.
South Korea’s Supreme Court guidelines Bitcoin on exchanges might be legally seized underneath Criminal Procedure Act, establishing precedent as regulators increase asset freeze powers and AML enforcement.#SouthKorea #Bitcoinhttps://t.co/3fa5PxHMMG
— Cryptonews.com (@cryptonews) January 9, 2026
Such a authorized foundation was initially established in 2018, when the Supreme Court determined that cryptocurrencies are intangible belongings and have financial worth and thus might be seized in case they’re linked to against the law.
Later judicial choices have additional broadened the ability of the seizure, and a December case verified that the bitcoin stored on home exchanges like Upbit and Bithumb may be confiscated.
The latest case arrived on the day when the South Korean regulators are busy growing management over the crypto business.
In January, financial regulators announced an intention to test a payment freeze system whereby investigators can briefly freeze crypto-related accounts earlier than the suspected illicit funds are taken off or deposited in an offshore account.
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