- Seoul Gangnam Police lost 22 BTC worth $1.45M during a 2026 digital asset custody audit.
- The 22 seized BTC were drained remotely while the USB cold wallet remained in police custody.
- South Korea reported two custody breaches in 2026, including a separate 320 BTC loss in Gwangju.
South Korean authorities have confirmed the loss of 22 Bitcoin valued at about $1.45 million from seized assets held by the Seoul Gangnam Police Station. The funds were kept as evidence in a suspended 2021 investigation. The loss was discovered during a nationwide audit of digital asset custody practices conducted in early 2026.
Audit Reveals Missing Bitcoin From Police Custody
The missing 22 BTC were identified during a broad inspection of virtual asset management across law enforcement agencies. Officials said the discovery was made on February 13, 2026. The assets were worth around 2.1 billion won at the time of confirmation.
The Bitcoin had been stored on a USB cold wallet kept in police custody. Authorities stated that the physical device had not been stolen or tampered with externally. However, the digital assets linked to the wallet had been transferred to an external address.
The related criminal investigation from 2021 had been suspended. As a result, the wallet remained unmonitored for more than four years. The funds were originally surrendered voluntarily to investigators in November 2021.
Internal Probe Examines Cause of Breach
The Gyeonggi Bukbu Provincial Police Agency is leading an internal investigation into the incident. Officials are examining whether the loss resulted from external hacking or internal negligence. No final conclusion has been announced.
Authorities confirmed that the Bitcoin was moved remotely despite the cold wallet remaining in custody. Investigators are reviewing access records and digital logs. They are also assessing whether proper security protocols were followed during the storage period.
Law enforcement agencies have not released details about potential suspects. The case remains under active review. Officials stated that further updates will be provided once the investigation progresses.
Broader Digital Asset Custody Concerns in 2026
This case marks the second reported digital asset custody failure in South Korea in early 2026. In late January, the Gwangju District Prosecutors’ Office reported the loss of 320 BTC. The estimated value ranged between $29 million and $48 million at the time.
According to reports, investigators in the Gwangju case accessed a phishing website during a staff transition. Outdated credentials that had not been changed for over two years were reportedly compromised. The breach led to unauthorized access to digital wallets.
Following these incidents, the Financial Supervisory Service released its 2026 oversight plan. The plan includes stricter IT risk management rules and punitive fines for system failures.
It also calls for the use of AI monitoring tools to prevent digital asset theft and market manipulation. Authorities said the new measures aim to strengthen virtual asset custody standards across institutions.
Source: https://www.livebitcoinnews.com/south-korean-police-lose-1-5m-in-seized-bitcoin/
