South Korea reviews seized crypto after security breaches

South Korea is reviewing public agency crypto management after major breaches, including lost Bitcoin and leaked wallet credentials, to strengthen digital asset security and prevent future incidents.

South Korea has launched a comprehensive review of how government agencies manage seized digital assets after several high-profile security breaches. Notable incidents include the police losing 22 Bitcoin, a major accounting error at Bithumb, and the National Tax Service accidentally leaking a hardware wallet seed phrase. This leak resulted in the theft of approximately 4 million Pre-Retogeum tokens, valued at around $4.8 million. Deputy Prime Minister Koo Yun-cheol announced that, together with the Financial Services Commission and the Financial Supervisory Service, the government will assess the current management protocols for all digital assets held by public institutions through seizures and enforcement actions. The initiative aims to strengthen digital asset security, reduce operational risks, and prevent similar incidents. Officials emphasized that the government only holds crypto assets obtained through legal enforcement, not for investment purposes.