Key highlights:
- South Korean prosecutors lost nearly $48 million in seized Bitcoin after an employee fell for a phishing scam.
- The theft was discovered during a routine inspection of confiscated financial assets held by the authorities.
- The incident highlights growing concerns about how governments secure and manage confiscated cryptocurrencies.
South Korea’s Prosecutors’ Office has lost nearly $48 million worth of confiscated Bitcoin after falling victim to a phishing attack, according to local media reports. The cryptocurrency vanished after an employee unknowingly entered login credentials on a fraudulent website.
The loss was discovered by the Gwangju District Prosecutors’ Office during a routine inspection of seized financial assets. South Korean media reported that roughly 70 billion won, equivalent to about $47.7 million, was stolen.
According to Chosun Daily, the prosecutors’ office said the Bitcoin disappeared following a password leak. A representative later confirmed that the incident was caused by a phishing attack, in which an employee accessed a fake website designed to mimic a legitimate service.
Phishing remains one of the most common threats faced by cryptocurrency holders. Scammers frequently create counterfeit websites or send deceptive emails to trick users into revealing passwords, private keys, or recovery phrases.
Phishing losses are falling, but risks remain
Despite this incident, industry data suggests that phishing-related losses in the cryptocurrency sector have declined. According to Scam Sniffer, losses from phishing attacks fell by more than 80% in early 2025, with total losses reaching $83.85 million. The number of victims also dropped by nearly 70%, to around 106,000.
South Korean authorities have declined to disclose the exact date of the Bitcoin seizure or the precise amount lost, citing an ongoing investigation. A spokesperson said prosecutors are working to determine the circumstances surrounding the theft and the current location of the seized assets.
Governments hold Billions in seized cryptocurrency
The case underscores a broader challenge facing law enforcement agencies worldwide. As cryptocurrencies grow more popular, authorities are seizing and holding increasing amounts of digital assets, often worth billions of dollars. However, the security measures used to store these assets are rarely disclosed.
South Korea is not alone in holding large crypto reserves. Last June, US authorities, with assistance from Coinbase, seized $225 million in cryptocurrency allegedly stolen by fraudsters, marking the largest crypto seizure in the history of the US Secret Service.
In the United Kingdom, officials last October considered retaining $6.4 billion in confiscated Bitcoin rather than compensating victims. Those assets were seized in 2018 from scammers who defrauded more than 128,000 investors in China.
Analysis
The incident highlights a structural problem in how public institutions manage digital assets. Traditional law enforcement agencies often rely on security practices designed for conventional financial assets, which may be ill-suited for cryptocurrencies.
The irony is difficult to ignore: agencies tasked with combating cybercrime are increasingly becoming targets themselves. While tools such as cold storage, multi-signature wallets, and hardware security solutions are widely recommended in the crypto industry, bureaucratic and procedural constraints can slow their adoption within government institutions.
As the volume of confiscated cryptocurrency continues to grow, the question remains whether existing systems are sufficient, or whether governments will need to fundamentally rethink how they store and protect digital assets.
Source:: South Korea Loses Nearly $48 Million In Bitcoin To A Phishing Scam