Prosecutors in South Korea’s Gwangju district have launched an investigation into the disappearance of Bitcoin valued at 70 billion won ($47.7 million). This was reported by local media.
The government agency discovered the missing Bitcoin during a routine audit of confiscated assets.
An internal audit revealed that the loss was due to a password leak. An employee fell victim to a phishing attack by accessing a fraudulent website.
“We are currently investigating the circumstances of the loss and the whereabouts of the confiscated assets. We cannot confirm any specific details,” commented representatives of the prosecution to Yonhap News.
In early January, the Supreme Court of South Korea deemed the seizure of Bitcoin from exchange wallets legal in criminal cases. Previously, only the confiscation of assets in favor of the state was allowed.
Uncovering a Criminal Crypto Network
On January 19, South Korea dismantled a money transfer network through which criminals moved digital assets worth 150 billion won (~$110 million).
The local customs service handed over the case to prosecutors, involving three suspects, including a 30-year-old Chinese national. They are accused of violating the Foreign Exchange Transactions Act.
Investigations revealed that over four years, the illegal operation laundered more than $100 million obtained through payment services WeChat Pay and Alipay. The scheme involved converting funds into cryptocurrency on foreign exchanges, transferring them to wallets in South Korea, and then cashing out.
To disguise the transfers, legitimate descriptions were used: payment for plastic surgeries and overseas student tuition.
In November, South Korea’s largest exchange, Upbit, suffered a hack amounting to $36.8 million due to a vulnerability in its internal system.