Hackers Steal $48 Million in Confiscated Bitcoins from South Korean Prosecutor's Office

The Gwangju prosecutor's office in South Korea is investigating the theft of approximately 70 billion won (about $47.7 million) in bitcoins. This incident came to light during a routine audit of confiscated digital assets, revealing the loss was attributed to a password leak following a phishing attack on an employee.

In a twist, a hacker involved in the incident returned 320.8 BTC to a government-controlled wallet after the prosecutor's office successfully blocked the hacker's attempts to withdraw the stolen funds from a centralized exchange. The hacker's identity remains unknown, and the investigation is ongoing.

“We are currently investigating the circumstances of the loss and the whereabouts of the confiscated assets. We cannot confirm any specific details,” stated a representative of the prosecutor's office to Yonhap News.

This case follows a significant ruling by South Korea's Supreme Court in early January, which recognized the legality of seizing bitcoins from exchange wallets in criminal cases, marking a shift from previous policies that only allowed for asset confiscation benefiting the state.

Criminal Crypto Network Uncovered

On January 19, authorities dismantled a money transfer network that facilitated the movement of digital assets worth around 150 billion won (approximately $110 million). The local customs service has referred the case to the prosecutor's office, targeting three suspects, including a Chinese national, for violating the Foreign Exchange Transactions Act.

The investigation revealed that the illegal operation laundered over $100 million through payment services like WeChat Pay and Alipay over four years. The criminals converted funds into cryptocurrency on foreign exchanges, transferred them to South Korean wallets, and subsequently cashed out, often disguising transactions with legitimate descriptions such as payments for plastic surgery and tuition fees.

This theft follows a previous incident in November when South Korea's largest exchange, Upbit, suffered a hack resulting in a loss of $36.8 million due to internal vulnerabilities.