South Korean authorities have launched an internal review after discovering that 22 Bitcoin confiscated during a 2021 investigation were transferred out of police custody without detection.
According to local reports, the Bitcoin had been voluntarily handed over to the Gangnam Police Station in Seoul in November 2021 as part of an ongoing case. However, during a recent internal audit, authorities discovered that the digital assets had been moved externally while the investigation remained suspended.
At current market prices — approximately 97.1 million won per Bitcoin — the missing funds are valued at roughly 2.1 billion won (around $1.5 million).
Importantly, investigators confirmed that the physical cold wallet used to store the cryptocurrency was not stolen. The transfer appears to have occurred without the station’s knowledge, raising concerns about internal management procedures for digital asset evidence.
Audit Triggered by Earlier 320 BTC Loss
The discovery followed a nationwide inspection ordered by the National Police Agency after a separate high-profile incident at the Gwangju District Prosecutors’ Office.
Last year, prosecutors in Gwangju reported the disappearance of 320 Bitcoin — worth approximately 40 billion won at the time. Subsequent investigations suggested that the loss may have been linked to a phishing attack, with an employee allegedly compromising credentials after accessing a fraudulent website.
The audit of cryptocurrency holdings across police stations ultimately uncovered the previously unnoticed 22 BTC transfer at the Gangnam Police Station.
Growing Concerns Over Digital Asset Custody
These back-to-back cases have intensified criticism over how South Korean law enforcement agencies handle seized digital assets. As cryptocurrencies become increasingly common in criminal investigations, proper custody management and cybersecurity protocols are emerging as critical vulnerabilities.
Earlier this year, authorities disclosed another internal security failure involving confiscated Bitcoin valued at approximately $48 million. That case was reportedly linked to password exposure following a phishing incident involving a government employee.
Officials have launched an internal review into the Gangnam case. Further details about how the 22 Bitcoin were accessed and transferred have not yet been disclosed.
The incidents underscore a challenge facing public institutions worldwide: securing digital assets requires not only physical safeguards, but also strict operational and cybersecurity controls.