South Korean prosecutors investigate missing seized Bitcoin

Investigators at the Gwangju District Prosecutors’ Office in South Korea are examining the disappearance of a substantial quantity of bitcoin confiscated in a criminal case, following an internal review that indicated a potential loss while under state custody, as reported by Yonhap News on Thursday.

According to the report, prosecutors contend that the bitcoin was lost approximately in the middle of last year during the storage and administration procedure, with a phishing event identified as a probable cause.

Prosecutors refrained from disclosing the magnitude or valuation of the missing assets and failed to offer any information, referencing the ongoing investigation, according to the newspaper.

The Gwangju District Prosecutors' Office has previously managed significant cryptocurrency seizure cases. In March 2024, the office aimed to retrieve approximately 170 billion won ($127 million) in bitcoin associated with an illicit gambling enterprise, as per a distinct local news source.

The formalization of bitcoin confiscation in South Korea commenced in 2018, when the Supreme Court determined that cryptocurrencies are intangible assets possessing property value, hence susceptible to the Criminal Procedure Act.

South Korean prosecutors investigate missing seized Bitcoin

The groundbreaking ruling permitted the state to confiscate 191 BTC (1.64%) from a convicted operator of a child pornography website, an asset accumulation estimated at $2.3 million at that time. This verdict established the legal framework for the state to classify digital tokens as “evidence or items subject to confiscation,” contingent upon their relevance to a criminal proceeding.

On December 11 of the previous year, the Supreme Court issued a verdict, as reported by local media, affirming that bitcoin stored on centralized exchanges like Upbit and Bithumb is likewise liable to seizure.

The case originated with a January 2020 police confiscation of approximately 55 BTC from an exchange account amid a money laundering inquiry, a decision that was ultimately affirmed following multiple appeals.

The court ruled that bitcoin qualifies as electronic information with intrinsic economic worth and is hence liable to confiscation by investigative agencies.