South Korea’s Deputy Prime Minister and Finance Minister Koo Yun-cheol has ordered a cross-agency review of how authorities manage seized digital assets following a high-profile custody failure. The move comes after the National Tax Service published a press release image that inadvertently revealed the full recovery phrase of a confiscated hardware wallet. The exposure enabled unknown actors to drain approximately 4 million Pre-Retogeum tokens valued at about 6 billion won, or $4.8 million.
The review will involve the Ministry of Economy and Finance, the Financial Services Commission, and the Financial Supervisory Service. Officials said the inspection will assess the status and safeguarding of all digital assets seized from delinquent taxpayers and strengthen security controls. The incident follows a separate case in which local police reportedly lost 22 Bitcoin seized in a prior hacking investigation, raising broader concerns about public sector crypto custody practices.
The probe underscores growing regulatory scrutiny around digital asset management as South Korea tightens oversight of virtual assets. As governments increasingly seize and hold cryptocurrencies through enforcement actions, institutional-grade custody standards are becoming a central governance issue within the country’s broader crypto regulatory framework.
