South Korean law enforcement agencies have encountered yet another incident of confiscated digital assets disappearing, recording the theft of approximately $1.5 million in Bitcoin. This is the second major loss of state cryptocurrency reserves this year, calling into question the reliability of existing evidence storage protocols. An investigation into the incident by the Gangnam Police Department began immediately after the discovery of empty balances on the hardware drives.

According to the investigation, 22 BTC were seized in November 2021 and placed in a cold wallet, which remained physically untouched in the vault. However, the absence of the Bitcoin from the blockchain was only discovered several years later, as the main criminal case remained frozen. The fact that the hardware wallet itself never left the police station, yet the funds were withdrawn, suggests a possible compromise of the seed phrase or direct access to the keys by those responsible for storing the evidence.

The theft was discovered as part of a large-scale nationwide investigation initiated by the country's leadership following the shocking incident in Gwangju. In January, it was reported that 320 BTC, worth over $21 million, had been stolen from the city's prosecutor's office. Investigators determined that employees overseeing evidence storage had been victims of a phishing attack after clicking a malicious link, which led to the instantaneous depletion of government crypto accounts last summer.

A series of similar incidents highlights systemic problems in managing digital confiscations not only in South Korea but also in other countries. While Israeli authorities are combating the use of insider data by the military for betting on blockchain platforms, Korean law enforcement is being forced to overhaul their entire cybersecurity system. The lack of regular auditing and human error make confiscated bitcoins a vulnerable target, requiring the implementation of multi-signature technologies and stricter delimitation of access rights to keys.