South Korean Prosecutors Sell $21.5 Million in Recovered Seized Bitcoin
South Korea’s Gwangju District Prosecutors’ Office has liquidated 320.8 BTC originally confiscated during a 2018–2021 raid on an international online gambling operation. The proceeds—approximately 31.6 billion KRW ($21.5 million at the time of sale)—were transferred to the national treasury, according to reports from Chosun Ilbo and other local media outlets published March 10, 2026.
The bitcoin was seized as evidence of laundered criminal proceeds converted into cryptocurrency.
Phishing Incident and Unexpected Recovery
In August 2025, officials managing the seized wallet fell victim to a phishing attack, resulting in the theft of the entire 320.8 BTC. The breach went undetected until December 2025.
Remarkably, in February 2026 the hacker voluntarily returned the full amount to the original wallet. Prosecutors immediately restricted access to liquidation channels to prevent further loss and then proceeded to sell the bitcoin in batches over 11 days (February 24 – March 6, 2026).
The perpetrator remains at large and is still under investigation.
Pattern of Security Lapses in Korean Agencies
The Gwangju incident is part of a broader series of recent mishandling of digital assets by South Korean authorities:
- Seoul Gangnam Police Station — lost 22 BTC stored in a USB cold wallet since 2021 (wallet itself never stolen; internal investigation ongoing).
- National Tax Service — accidentally published a wallet recovery phrase in an official report, leading to the theft of 4 million PRTG tokens (theoretical value $4.8 million at the time).
These repeated incidents have triggered widespread criticism regarding insufficient technical training, lack of standardized custody protocols, and poor handling of cryptocurrency evidence among law enforcement and tax agencies.
Market Context (March 10, 2026)
- Bitcoin price reaction has been muted; BTC trades in a relatively narrow range around recent levels.
- No significant sell-off pressure was observed from the 320.8 BTC disposal, likely because the sale was executed gradually and in a period of already elevated institutional buying.
The case highlights ongoing challenges governments face when managing seized digital assets, even years after confiscation.
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