South Korean prosecutors experienced a bizarre turn of events involving approximately $21 million worth of Bitcoin, managing to both lose and recover the funds in a peculiar incident.
The case began in 2021 when the Gwangju District Prosecutors Office confiscated 320.88 Bitcoin during the course of an investigation. Instead of securing the assets, officials fell victim to a phishing scam, with an employee entering cryptocurrency wallet access details on a fraudulent website, resulting in the loss of all the confiscated Bitcoin.
Remarkably, the theft wasn’t discovered until January of this year – nearly six months after it occurred. Once authorities realized the wallet was empty, a frantic effort began to block the address on all local cryptocurrency exchanges. Then, unexpectedly, the hacker voluntarily returned all the Bitcoin to the prosecutor’s office wallet.
Prosecutors believe the hacker determined the funds were too “hot to handle,” and that the compromised wallet address had already been flagged on major exchanges, making it difficult to cash out the Bitcoin without risking apprehension. Returning the funds, they reasoned, was a safer option than being caught with an untraceable, yet unusable, fortune.
Although the funds have been recovered, South Korean law enforcement has pledged to continue investigating the incident and hold the perpetrator accountable. Further audits will also be conducted across other government agencies to determine if any additional cryptocurrency seized during criminal investigations has been similarly lost. The incident underscores the challenges facing authorities as they navigate the complexities of securing digital assets.
