South Korean prosecutors are undertaking investigations after millions of dollars worth of Bitcoin seized in a criminal case was reportedly stolen.
Local media reports from Friday suggest that several Bitcoins have reportedly vanished in the process of storage and management by the prosecutors, an incident said to have taken place in the middle of 2025.
The case has once again brought out concerns about the handling and safekeeping of confiscated crypto assets impounded during legal proceedings.
While authorities have not officially declared the amount involved, local media and sources are estimating the loss to be in the range of about $48 million to $49 million.
The preliminary investigations are pointing at a phishing attempt rather than the external hack of state networks. The result of the incident, however, has made the market sceptical about the reliability of state custody, especially with seized assets.
Phishing is one of the most common attacks when it comes to crypto markets. Attackers attempt to gain access to a wallet by spoofing well-known websites or emails that just might trick a crypto user into sharing private keys.
The case also comes at a time when South Korea has been the epicenter of phishing scams in 2025. According to a report by the Korean Financial Crime Prevention Association (KFCPA), losses from phishing attacks increased by 98% from 2024 to KRW 6.4 trillion ($4.9 billion) in the first half of 2025.
How did the Bitcoin get stolen?
Early investigations show that the private keys were stored on a USB drive with the prosecutors taking sole custody of the wallets.
During a routine check, an employee accidentally clicked on a fake website, which allowed the credentials to leak. Once the keys were exposed, the Bitcoin was quickly moved out of the wallet, a transfer that cannot be undone.
Gwangju District prosecutor opens investigation for missing Bitcoin
The Gwangju District Prosecutors’ Office said it has opened an internal probe into the incident, but declined to share further details, including the value of the missing assets or specifics of its handling procedures, citing the ongoing investigation.
Authorities have also not disclosed whether any disciplinary steps have been taken or if custody protocols will be revised.
The case arrives barely weeks after South Korea’s Supreme Court ruled on January 8, 2026, that Bitcoin on exchange platforms like Upbit and Bithumb is subject to criminal seizure.
This decision is based on previous decisions taken in 2018 and 2021 that acknowledged the value of cryptocurrencies as intangible assets, increasing the scope of the state’s ability to confiscate those assets in criminal proceedings.