Nickel-plated feet. In a matter that could make one blush with embarrassment any police department, South Korean authorities recently arrested two people in connection with the loss of 22 seized bitcoins, currently worth $1.4 million. These funds, confiscated in 2021, mysteriously disappeared after being stored in a third-party cold wallet, which is a blatant violation of security protocols.
The key points of this article:South Korean authorities have arrested two people after 22 seized bitcoins mysteriously disappeared, revealing shocking police negligence.
This loss of bitcoin highlights worrying flaws in the South Korean police's handling of digital assets, exacerbating already existing criticism.
A series of police negligence in South Korea with bitcoins seized
According to the local press, the gangnam policein Seoul, committed several errors criticisms in this matter. After entering the 22 BTC of a company hacked in 2021, law enforcement was supposed to transfer these digital assets to an offline wallet under their control. However, they left the funds in a wallet managed by a third party entity, without even having the recovery phrase necessary to access it. This neglect led to the funds being lost in 2022 when the company holding the recovery phrase “loaned” bitcoins to an individual identified as « Jeong »who also received the phrase secret of the wallet. In other words, the police literally gave the keys to the house to a unknown.
The South Korean police got their feet wet and could not handle the seizure of these bitcoins
Arrests that raise more questions
The disappearance of these bitcoins was only discovered this year, during a audit led by the Gwangju District Prosecutors Office, which was investigating another case involving the loss of 320 BTC. As part of the investigation into 22 BTC missing, North Gyeonggi Provincial Police arrested two individuals.
“We are currently investigating the events that led to the loss of these bitcoins”said a police official. However, the exact details of how the funds were able to be “borrowed” remain blurry. This case highlights problems systemic issues within South Korean law enforcement regarding the management of digital assets. While the country is already under fire after a error monumental of Bithumbwhich accidentally distributed $43 billion in Bitcoin to its users, this news blunder only makes the situation worse. South Korea, although a pioneer in the adoption of cryptocurrencies, seems to be struggling to keep up with the rapid pace of this sector. Financial regulators and authorities are clearly under pressure to strengthen controls and prevent such errors from happening again.