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- Two suspects arrested after 22 Bitcoin vanish from custody
- Police stored seized crypto on foundation provided wallet
- Bribery scandal resurfaces in widening South Korea crypto probe
South Korean police have arrested two individuals after 22 Bitcoin disappeared from official custody, intensifying scrutiny over the handling of seized digital assets. Police officials verified the arrests on 25th February and investigators tried to track the stolen money.
The suspects were charged by the Gyeonggi Northern Provincial Police Agency in the violation of the Information and Communications Network Act. According to investigation claims, the two spilled the coins out of a machine that was kept at the Gangnam Police Station. The arrests were covered in the local outlet JoongAng Ilbo that a review of evidence storage processes within the company has led to the arrests.
The 22 BTC have an approximate value of $1.5 million in the contemporary market. The cryptocurrency was initially seized in November 2021 by officers when the investigation of the A Coin Foundation was conducted. That case was initiated upon the announcement by the foundation of the loss of 700 million units of its native token.
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Cold Wallet Storage Raises Custody Concerns
The authorities subsequently established that the officers had put the confiscated Bitcoin on a cold wallet issued by A Coin Foundation. Police used hardware attached to the complainant instead of putting the assets on a state managed device. As a result, investigators started to investigate whether such decision put the funds under unauthorized access.
It is reported that the people who are arrested have ties to the foundation. The investigators believe that they used the mnemonic recovery phrase on the wallet to access and transfer the Bitcoin. Authorities are yet to verify whether the lost 22 BTC has been retrieved.
Bribery Case Adds Further Pressure
There is also an emphasis on the initial detective who was involved in the hacking probe in 2021. The retired senior superintendent, who has only been denoted by D is serving an 18 month sentence in prison. He was convicted on bribery charges related to the same foundation by a court in August 2024.
Court records that were reported in the local media indicate that the foundation officials bribed their way to expedite the hacking investigation and direct the investigation. Law enforcers claimed the virtual asset leakage was under investigation and refused to share more information as investigations are underway.
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