South Korean prosecutors sell $21.5 million in seized bitcoin once lost to phishing attack

South Korea's Gwangju District Prosecutors' Office has sold 320.8 bitcoin (BTC) and transferred 31.6 billion Korean won ($21.5 million) in proceeds to the national treasury, according to multiple local media outlets.

The bitcoin was originally seized during a raid on an international gambling platform that operated from 2018 to 2021, where operators concealed criminal proceeds by converting them into bitcoin.

Gwangju prosecutors lost the seized bitcoin in August 2025 after officials responsible for managing the bitcoin fell victim to a phishing website and had the cryptocurrency stolen. The hack was not discovered until December.

The situation took another turn last month when the hacker returned the 320.8 BTC to the wallet held by the authorities. Prosecutors said they blocked the wallet's access to various liquidation channels before the bitcoin was returned.

Chosun Ilbo reported Tuesday that the prosecutors' office sold the bitcoin in batches across 11 days, from Feb. 24 to March 6. The hacker behind the incident remains at large, and the authorities said they will continue the investigation.

Security lapse

The incident, along with other recent security lapses, highlights a recurring pattern of mishandling digital assets across South Korean agencies.

Following the Gwangju incident, a nationwide internal investigation revealed that the Seoul Gangnam Police Station had lost 22 BTC stored in a USB cold wallet since 2021. The police agency said it is investigating the possibility of internal involvement, as the cold wallet itself was never stolen.

The country's National Tax Service also recently came under fire after inadvertently exposing a crypto wallet recovery phrase in a public report. Following the disclosure, 4 million Pre-Retogeum (PRTG) tokens — theoretically valued at $4.8 million — were transferred from the wallet to an unidentified address.

These repeated blunders have drawn public criticism over the lack of technical literacy and standardized security protocols among the country's law enforcement and tax authorities.