South Korean Prosecutors Liquidate Recovered Seized 320.8 Bitcoin Stash

TLDR

• Gwangju prosecutors sold 320.8 BTC and sent 31.6 billion won to the national treasury.

• The Bitcoin had been seized from an illegal gambling platform active from 2018 to 2021.

• Officials lost the assets in 2025 after falling for a phishing site, then recovered them in February.

• Chosun reported the office sold the BTC in batches over 11 days from Feb. 24 to March 6.

South Korean prosecutors have sold Bitcoin once lost in a phishing attack after regaining control of the assets. The sale turned a troubled custody case into a 31.6 billion won transfer to the national treasury.

The Gwangju District Prosecutors’ Office liquidated 320.8 BTC that had been seized in an earlier gambling case. The news angle centers on the sale of recovered seized Bitcoin after a public custody failure by authorities.

Seized Bitcoin was Sold After Recovery

The prosecutors’ office sold 320.8 BTC and sent the proceeds to South Korea’s national treasury. Local reporting said the sale raised 31.6 billion won, or about $21.5 million.

Chosun reported that officials sold the Bitcoin in batches across 11 days. The sales ran from February 24 to March 6 after the recovered assets were secured.

The Bitcoin had originally been seized during a raid on an international gambling platform. Prosecutors said the platform operated from 2018 to 2021 and converted criminal proceeds into Bitcoin.

That case placed the assets under state custody, but the storage process later failed. The liquidation now closes one part of that episode, though the cybercrime case remains open.

Phishing Attack Caused the Earlier Loss

Gwangju prosecutors lost the seized Bitcoin in August 2025 after officials managing the assets visited a phishing website. The loss was not discovered until December, according to reporting cited by The Block.

The phishing incident raised new concern over how public agencies handled seized digital assets. It showed that custody risks can remain high even when the assets are already in government hands.

The case then took another turn in February 2026 when the hacker returned the 320.8 BTC. Prosecutors said they had blocked the wallet’s access to liquidation routes before the funds came back.

Authorities have not announced an arrest in the phishing case. Reporting says the hacker remains at large and the investigation is still ongoing.

Wider Custody Failures Came into Focus

The Gwangju case drew more attention because it was followed by other custody failures in South Korea. A nationwide internal review later found that Seoul’s Gangnam Police Station had lost 22 BTC from a USB cold wallet.

In that case, the wallet itself was reportedly not stolen, yet the Bitcoin disappeared. Authorities said they were investigating possible internal involvement because the loss could not be explained by a simple device theft.

Another controversy emerged at the National Tax Service. Reports said a wallet recovery phrase appeared in a public report, and tokens were later moved from the exposed wallet.

These incidents increased scrutiny of technical controls at law enforcement and tax agencies. Public criticism has focused on weak crypto handling standards and poor security procedures.

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