South Korean prosecutors investigating the loss of Bitcoin (BTC) seized in a criminal case after a suspected phishing attack compromised state custody around mid-2025.
The Gwangju District Prosecutors' Office recently discovered a substantial amount of confiscated cryptocurrency had disappeared during the storage and management process, according to Yonhap News.
Internal investigation points to phishing as the likely cause of the loss.
What Happened
Prosecutors declined to disclose the specific value or quantity of missing bitcoin, citing an ongoing investigation into how the assets vanished from state custody.
"We are conducting an investigation to track the circumstances and whereabouts of the lost seized items," a prosecutor told Yonhap News on Thursday.
The office could not confirm further details about the incident.
The Gwangju office has previously handled large-scale cryptocurrency seizure cases involving substantial bitcoin amounts.
In one 2024 illegal gambling investigation, prosecutors attempted to confiscate 24,613 BTC - worth approximately $2.2 billion at current prices - from an operator who ran betting sites based on Bitcoin price fluctuations between 2018 and 2021.
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Why It Matters
The loss raises questions about custody protocols for seized cryptocurrency assets as South Korean authorities expand enforcement against crypto-related crimes.
South Korea's Supreme Court established legal authority to seize exchange-held bitcoin in 2018, ruling that cryptocurrencies constitute intangible assets with property value subject to confiscation.
A December 2025 Supreme Court ruling further clarified that bitcoin held on centralized exchanges like Upbit and Bithumb qualifies as seizable property during criminal investigations.
The ruling stemmed from a 2020 case where police confiscated 55.6 BTC during a money laundering probe.
The incident exposes vulnerabilities in how law enforcement agencies secure seized digital assets, which require specialized custody solutions unlike traditional confiscated property.
South Korean authorities have intensified cryptocurrency enforcement recently, with prosecutors establishing dedicated crypto crime units handling cases involving billions of won in seized assets.
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