Police in Seoul, South Korea, lost custody of 22 Bitcoin, worth approximately $1.4 million, after failing to follow secure storage protocols. Officers from the Gangnam Police Station allowed a third-party to manage the seized cryptocurrency instead of transferring it to their own controlled wallets. An investigation initiated after a separate, larger crypto loss uncovered the incident, leading to the arrest of two suspects. The case is connected to earlier bribery charges against a member of the investigative team.
Police officers from Seoul’s Gangnam Police Station lost access to 22 Bitcoin, worth about $1.4 million, after not adhering to official custody guidelines. According to the report, they allowed the seized funds to remain in a wallet managed by a third-party firm instead of securing them in a police-controlled cold wallet.
National Police Agency guidelines recommended transferring seized virtual assets to an investigative agency’s hard wallet for secure storage. The police did not possess the seed phrase for the wallet, which ultimately led to the loss of the Bitcoin in 2022.
The funds were discovered missing this year during a review that also found 320 Bitcoin, worth around $21 million, were lost in a different case. The Gyeonggi Northern Provincial Police Agency has arrested two individuals in connection with the missing 22 Bitcoin.
“We are currently investigating the specific circumstances, including how the Bitcoin was leaked out,” a police official stated. The investigation follows reports that the third-party firm offered bribes to influence the original hack investigation.
A member of that initial investigation team was indicted on bribery charges last year. The incident adds to recent scrutiny of South Korean authorities regarding cryptocurrency management.
