South Korea’s Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol has ordered a cross-agency review of how seized digital assets are handled after the National Tax Service leaked a wallet seed phrase in a press release.
The tax authority inadvertently published a photo showing the full recovery phrase of a confiscated hardware wallet, enabling unknown actors to drain roughly 4 million Pre-Retogeum tokens worth about 6 billion won, or $4.8 million.
Koo said the government, alongside the Financial Services Commission and Financial Supervisory Service, would review seized digital asset management and “promptly” strengthen security controls.
He added that the state does not hold cryptocurrency beyond assets obtained through law enforcement actions, as officials seek to reassure the public over safeguards.
The incident followed a separate custody lapse in which Seoul’s Gangnam police reportedly lost 22 bitcoin seized in a 2021 hacking case after entrusting the funds to a third-party custodian.
Authorities said the inspection is intended to prevent recurrence of such failures and address broader weaknesses in public sector crypto asset controls.
The review comes as South Korea continues tightening its virtual asset oversight framework amid growing scrutiny of enforcement and custodial practices.
At the time of reporting, Bitcoin price was $68,815.43.