In what seems more like a dark comedy than a procedural drama, officers at the Gangnam Police Station in Seoul were caught mishandling Bitcoin. They didn’t just give up the password, but they gave the keys to the thief.
The mistake resulted in the loss of $1.4 million in Bitcoin, prompting an investigation that has since led to an arrest.
Back in 2021, officers at the Gangnam Police Station seized 22 Bitcoins from a company involved in a hacking case. At today’s prices, that hide is worth about $1.4 million.
Standard procedure dictates that the seized crypto must be transferred to a secure cold wallet controlled only by the police. The National Police Agency even has specific guidelines recommending that assets be kept in a “separately installed safe” in a hard wallet managed by the investigative agency.
The Gangnam police ignored this. Instead, they allow the funds to sit in a fund managed by a third party. Worse, the police didn’t even have the seed name, the password needed to access the funds. They take the safe but let the stranger keep the combination.
Predictably, the funds disappeared. In 2022, a person identified as “Jeong,” who had access to the wallet’s passphrase, transferred the Bitcoin. Police even realized the money had run out this year, nearly two years later, during an unrelated audit by the Gwangju District Prosecutors Office.
According to local media reports, an official from the Gyeonggi Northern Provincial Police Agency said, “We are investigating the circumstances surrounding the material leak, and as the investigation is still ongoing, we cannot confirm anything.”
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The South Korean government seized a Bitcoin wallet.
Then, without realizing what they’re doing, they share photos that reveal the wallet’s seed phrase.
They ended up losing to those who were beaten #Bitcoin everything again. pic.twitter.com/OvSnuzvhsq
— Ferre (@FerreWeb3) February 27, 2026
Reports suggest that the failure to secure the keys may not have caused the accident. A former official in the first team of investigators has been charged with bribery, with allegations that a third company paid bribes to ensure that the investigation was in their favor.
Similarly, breach of trust has arisen in the past when a crypto CEO was convicted of running a massive Ponzi scheme. Whether it is a CEO or a police officer, if someone is bribed or negligent, your finances are at risk.
Notably, this comes after South Korean regulators were accused of missing a mistake that led to a miscalculation of $43 billion in the Bithumb exchange. The gap between the endless regulatory bans of traders and the sloppy operational security of the regulators themselves is becoming impossible to ignore.
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Restraint brings its own dangers. It prevents remote theft, but physical threats are real. Just look at the recent wrench attack on a Binance employee in France.
Two suspects, including “Jeong,” were arrested by the Gyeonggi Northern Provincial Police Agency. The investigation is now focused on how the Bitcoin was leaked and whether other police officers were involved in negligence or bribery.
For the South Korean government, this is a humiliating wake-up call. We expect the new strict protocols to be implemented in all areas that handle digital evidence.
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Key Takeaways
- South Korean police lost $1.4 million in Bitcoin seizures because they allowed a third party to control private keys.
- The incident highlights a serious failure in operational security, exacerbated by allegations of bribery within the investigative team.
- This serves as a reminder to practice self-control; never rely on third parties to protect your long-term assets.
The post South Korean Police Mishandled $1.4M In Bitcoin: Suspects Arrested appeared first on 99Bitcoins.
