Prosecution Loses 40 Billion Won in Bitcoin... Launches Audit of Five Investigators

Phished During Handover
Disciplinary Action Planned if Negligence Confirmed

Exterior view of Gwangju District Prosecutors' Office.

The Gwangju District Prosecutors' Office, which lost hundreds of billions of won worth of confiscated cryptocurrency due to a phishing crime, has launched an internal audit to determine whether the investigators in charge were negligent in their duties.

On January 28, the Gwangju District Prosecutors' Office announced that it had begun an audit to investigate the circumstances of the loss of confiscated Bitcoin, focusing on five investigators responsible for managing the seized assets.

According to the prosecution, these investigators are suspected of having 320 Bitcoins (currently worth about 40 billion won) stolen during the handover of work duties in August last year.

The investigation found that, at the time, the investigators attempted to verify the amount of Bitcoin stored in a USB-type electronic wallet (cold wallet) by accessing a website. However, the site they accessed, believing it to be the official site, was actually a phishing site set up by hackers.

There were also signs of poor management. After the incident, the investigators only checked the physical existence of the electronic wallet during monthly inspections of seized assets, but did not verify whether the actual Bitcoins were present inside the wallet.

As a result, the prosecution only became aware of the loss belatedly while recently initiating the process to transfer the confiscated Bitcoins to the national treasury.

The prosecution has collected mobile phones and other devices from the investigators and is currently analyzing them. If the audit reveals serious negligence, disciplinary action and other follow-up measures will be taken. In addition, if any evidence of criminal activity emerges during the audit, the case will immediately be upgraded to a formal investigation.

Currently, prosecutors believe the Bitcoin theft itself was the work of external hackers. Accordingly, they are conducting a separate investigation to track the hackers, including executing search and seizure warrants. No evidence of collusion or involvement by insiders has been found so far.

A representative of the Gwangju District Prosecutors' Office stated, "We will do our utmost to thoroughly investigate the circumstances, apprehend those responsible for the theft, and recover the lost Bitcoins," adding, "We will use this incident as an opportunity to review the overall management of confiscated cryptocurrency and address any shortcomings."