South Korea Tightens Seized Crypto Rules After 22 BTC Loss
- At Seoul Gangnam Police Station, 22 BTC vanished while the USB device stayed secured.
- National Police Agency audit began after prosecutors lost 320 BTC in Gwangju to phishing.
- Prosecutors now verify wallets via Blockchain.com and Etherscan to curb key misuse.
South Korean authorities plan new management guidelines for seized cryptocurrencies after police discovered 22 Bitcoin missing during an investigation. The loss occurred at the Seoul Gangnam Police Station. Investigators found the 22 BTC, worth about $1.5 million, no longer sat in the cold wallet used since November 2021. The physical USB cold wallet remained in police custody, yet someone moved the Bitcoin to an external wallet without authorization.
Police discovered the issue during an internal review. Officers did not report the device stolen. Still, the on-chain funds were gone. The case has raised concerns about how law enforcement controls access to seized digital assets.
According to Binance News, the missing Bitcoin had been seized as evidence in a criminal case in late 2021. Police kept the assets in sealed storage for years. The loss came to light after a wider review of seized crypto holdings began.
Nationwide Audit Expands After Separate Loss in Gwangju
The National Police Agency launched a nationwide audit of seized digital assets after a separate case in Gwangju. Prosecutors in Gwangju District admitted they lost 320 Bitcoin during an evidence transfer. A phishing scam compromised the transfer process.
That earlier incident triggered broader inspections across the country. Those checks then led to the Gangnam discovery. In other words, the wider audit exposed the missing 22 Bitcoin.
Authorities said they are investigating how the Gangnam transfer happened. They are also examining whether internal personnel played any role. The Gyeonggi Northern Provincial Police Agency is leading the internal probe.
Investigators are reviewing how wallet access was handled. They are also assessing whether private keys were exposed. In addition, they are looking for procedural gaps that may have allowed the transfer to go unnoticed for years.
Prosecutors Circulate a New Management Plan
At the same time, prosecutors moved to tighten control measures. According to the Ghosun Daily, the Supreme Prosecutors’ Office created a management plan for seized virtual assets. It delivered the plan to prosecutors’ offices nationwide.
The legal sector reported on the 23rd that the Supreme Prosecutors’ Office shared the plan through an official communication. The guidance requires prosecutors to check wallet holdings using official blockchain websites.
The plan also lists specific sites for each asset. It names blockchain.com for Bitcoin checks. It names Etherscan for Ethereum checks. The goal is to standardize how offices verify holdings.
The Gwangju District Prosecutors’ Office lost 320 bitcoins worth about 30 billion Korean won in market value last month. It later recovered all of them, according to the same reporting. Officials framed the management plan as a step to reduce repeat incidents.
Related: South Korea Tightens Crypto Oversight to Track Hidden Assets
New Guidelines Target Access Control and Reporting
South Korean authorities are now preparing new guidelines for handling cryptocurrencies seized in criminal cases. The measures aim to strengthen oversight and reporting. They also aim to reduce the risk of unauthorized transfers.
The planned approach includes tighter access controls. It also includes more frequent verification of on-chain balances. In addition, it calls for improved audit trails tied to access and transfers.
The Gangnam case shows a key risk in crypto custody. A cold wallet device can remain physically secure while the funds move elsewhere. That reality makes private key control central to evidence management.
With these cases in view, authorities are shifting procedures for digital evidence. They are working to align seized crypto handling with stricter custody practices used for traditional assets such as cash and gold.
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