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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korean prosecutors have lost more than 400 billion won (approximately $300 million) worth of Bitcoin that had been seized and held as criminal proceeds, prompting an internal investigation and search warrants against five investigators.
According to News1 on January 27, the Gwangju District Prosecutors’ Office confirmed earlier this year that Bitcoin seized in connection with a criminal case had gone missing. The lost assets were part of confiscated proceeds from an overseas illegal online gambling operation, for which forfeiture had already been finalized by the Supreme Court.
The missing assets total 320.88 bitcoins. Based on the current market price of 128.81 million won per bitcoin, their value amounts to approximately 413.3 billion won.
The Bitcoin had been confiscated from a woman identified as A, who was indicted along with her father, B, for operating an online Bitcoin gambling site between 2018 and 2021 in Thailand. Prosecutors said the pair received deposits totaling about 24,600 bitcoins through the illegal platform.
After B was imprisoned, A reportedly took over the operation and later smuggled approximately 1,800 bitcoins into South Korea, concealing them domestically. Acting on intelligence, prosecutors launched an investigation and succeeded in seizing 320 bitcoins. The remaining 1,470 bitcoins were allegedly stolen by an unidentified individual who gained access to A’s blockchain account.
A was sentenced to five years in prison in the first trial, which was later reduced to two years and six months on appeal. Both the prosecution and the defendant appealed, leaving the case pending at the Supreme Court for an extended period. In January, the Supreme Court dismissed both appeals, finalizing the sentence and the forfeiture of the 320.88 bitcoins.
However, when prosecutors attempted to execute the forfeiture order, they discovered that the bitcoins had already disappeared from the electronic wallet. An internal review suggests the loss likely occurred in August last year.
Prosecutors believe the incident may have happened when staff accessed a phishing website, rather than a legitimate platform, while demonstrating custody transfer procedures for seized digital assets, resulting in the theft of the Bitcoin.
To recover the assets and determine the exact cause of the loss, prosecutors have seized and are conducting forensic analysis on mobile phones belonging to five investigators involved in the handling of the seized Bitcoin.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
