South Korean prosecutors have recovered approximately 321 BTC, valued at around $21 million, that was stolen from government custody in 2025. The funds were returned after authorities restricted the movement of the assets through centralized exchanges, according to local outlet Digital Asset.
Phishing Attack Led to Loss of Seized Bitcoin
The incident dates back to August 2025, when bitcoin previously confiscated during a raid on an illegal gambling platform was compromised. The Gwangju District Prosecutors’ Office later determined that investigators had mistakenly entered recovery seed phrases on a phishing website, enabling the attacker to access the wallet.
The loss was identified in December 2025 during an internal review of seized digital assets. Authorities did not publicly disclose the breach at the time of the theft.
Exchange Restrictions Pressured Return of Funds
On Tuesday, 320.8 BTC were transferred back to a wallet controlled by prosecutors, Digital Asset reported. Officials said they had taken steps to block transactions involving the hacker’s wallet on centralized exchanges, limiting the ability to convert the bitcoin into fiat currency or other digital assets.
Prosecutors stated that the identity of the individual responsible remains unknown.
The case has triggered a comprehensive review of how investigative agencies manage confiscated digital assets. Separately, authorities recently disclosed that Seoul’s Gangnam Police Station has been unable to account for 22 BTC held in cold storage since 2021.