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- South Korean prosecutors lose seized Bitcoin after a phishing attack exposes key credentials.
- Gwangju office security failures let attackers drain confiscated Bitcoin from official wallets.
- The breach intensifies concerns as South Korea faces rising crypto-related security incidents.
South Korean prosecutors confirmed a large loss of seized Bitcoin after a phishing attack compromised their internal systems. The incident surfaced during an inspection of confiscated assets. Officials disclosed that the breach took place in mid-2025 and involved unauthorized access to critical credentials.
The Gwangju District Prosecutors Office identified the problem during audits of digital asset storage processes. During the verification of confiscated Bitcoin logs, staff created a rogue website. Such a move revealed sensitive data and allowed these fraudsters to drain the crypto wallets.
Weak Credential Handling Exposed Major Security Gaps
According to an Ohmynews report, the office stored Bitcoin-related passwords on USB drives. This method failed to meet the industry’s recommended offline security practices. It also lacked multi-approval controls, which are standard for institutional custody of digital assets.
A prosecutor official confirmed the loss. However, the office declined to reveal the exact amount of Bitcoin taken. The figure remains undisclosed due to internal policy and ongoing assessments. Recovery efforts are underway, but the chances remain low once stolen funds move across external wallets.
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The disclosure came shortly after South Korea’s Supreme Court issued a notable ruling on crypto seizures. In December, the court decided that Bitcoin held on exchanges can be seized under the Criminal Procedure Act. The ruling was made public on January 9.
Bitcoin Seizure Ruling Mirrors Earlier Gwangju Controversies
The ruling was based on a case involving 55.6 BTC for a money laundering suspect. That asset pool had been estimated at 600 million won. The ruling affirmed the prosecutors’ desire for cohesion as the country broadens its regulations on digital assets.
Authorities in Gwangju have struggled with confiscated Bitcoin in the past. In 2021, a gambling probe-related police seizure resulted in the loss of 1,476 BTC. That case is also pending at the Supreme Court. The current phishing incident is unique and involves prosecutors from a police unit.
The attack is part of broader security issues in the crypto business. Ledger recently reported another breach of customer data, involving a third-party processor. PeckShield projects losses from phishing and scams in the cryptosphere to reach 1.37 billion dollars by 2025. South Korea has over 16 million crypto users, demonstrating the scale of exposure.
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