South Korean prosecutors investigate the disappearance of confiscated BTC

Source: CritpoTendencia Original Title: South Korean Prosecutors Investigate Disappearance of Confiscated BTC Original Link: Officials from the Gwangju District Prosecutor’s Office in South Korea are investigating the disappearance of a significant amount of BTC seized in a criminal case. The investigation was initiated after an internal audit detected a possible loss during the period of state custody, according to Yonhap News.

According to the report, South Korean prosecutors believe that the BTC was lost around mid-last year during storage and management processes. In this context, a phishing incident appears to be the most likely cause of the security breach detected.

The reference to phishing suggests that attackers may have employed social engineering techniques targeted specifically at officials responsible for safeguarding the private keys of state wallets. In such scenarios, cybercriminals often impersonate technical services or official authorities to induce personnel to reveal sensitive credentials or install malicious software that enables remote access to the funds.

It is worth noting that prosecutors refused to confirm both the volume and valuation of the missing assets and avoided providing additional details, claiming that the investigation is ongoing.

We are currently investigating the circumstances of the loss and the whereabouts of the seized items, stated a South Korean prosecutor. We cannot confirm any specific details, he added.

It is also relevant to remember that the Gwangju District Prosecutor’s Office has previously managed large-scale cryptocurrency seizures. As a precedent, in March 2024, it attempted to recover approximately ₩170.000 billion, equivalent to about $127 million, in BTC linked to an illegal betting network.

South Korea’s Robust Legal Framework

The institutionalization of BTC confiscation in South Korea dates back to 2018, when the Supreme Court ruled for the first time that cryptocurrencies are intangible assets with patrimonial value and, therefore, are subject to the Criminal Procedure Law.

Following this historic ruling, the South Korean state was able to confiscate 191 BTC belonging to a convicted operator of an illegal content website, a set of crypto assets valued at approximately $2.3 million at that time.

Additionally, the ruling established the legal framework to consider digital tokens as evidence or property subject to confiscation, provided they are directly related to a criminal process.

This scope was further expanded on December 11 of last year, when the Supreme Court issued a new ruling confirming that BTC stored on centralized exchanges can also be subject to seizure.

In that decision, the highest court stated that BTC constitutes electronic information with independent economic value and, consequently, is subject to confiscation by judicial authorities and investigative agencies.

BTC is an electronic token that possesses independent management capacity, commercialization, and substantial control over its economic value, and therefore is subject to seizure by courts or investigative bodies, stated the Supreme Court of South Korea.

This precedent facilitated, for example, another police seizure in January 2020, when more than 55 BTC were confiscated from an account on an exchange during an investigation for money laundering, a measure later ratified after a series of judicial appeals.

As a contextual note, over 16 million South Koreans own cryptocurrency wallets on the country’s major exchanges, representing nearly one-third of the total population.