South Korea Tax Office Leak Triggers $4.8M Crypto Loss

TLDR

• South Korea’s National Tax Service exposed a crypto wallet seed phrase in an official press release.
• Unknown actors used the leaked mnemonic to transfer 4 million PRTG tokens worth about $4.8 million.
• Blockchain data showed three inbound transfers followed by a single outbound transfer of the full balance.
• Professor Jaewoo Cho confirmed the theft and said the tokens were difficult to cash out.
• In a separate case, police found that 22 Bitcoin seized in 2021 had disappeared from a cold wallet.

South Korea’s National Tax Service exposed a crypto wallet seed phrase in an official press release and lost $4.8 million in seized tokens. The disclosure allowed unknown actors to access 4 million PRTG tokens and transfer the full balance. Authorities confirmed the incident after blockchain researchers traced the movements onchain.

South Korea National Tax Service Leak Exposes 4 Million PRTG tokens

South Korea’s National Tax Service published a press release about enforcement actions against tax delinquents, and it included an unmasked wallet mnemonic. The release showed an image of a Ledger cold wallet and a sheet displaying the full seed phrase. Local media outlets, including Naver and Chosun, reported that officials failed to blur the sensitive information.

Soon after publication, blockchain analysts linked the exposed phrase to an Ether address holding 4 million PRTG tokens. Onchain records show three inbound transfers totaling 4 million PRTG into the address. The data then shows one outbound transfer sending exactly 4 million PRTG to another wallet.

Associate professor Jaewoo Cho of Hansung University’s Blockchain Research Center reviewed the flows and confirmed the loss. He wrote on X, “We have confirmed that 4 million PRTG tokens, worth approximately $4.8 million, were stolen from the mnemonic that was leaked.” He also stated that “fortunately, the other exposed mnemonics do not seem likely to cause any major issues.”

Cho added that the stolen tokens were difficult to cash out, and he said “the actual damage is at a negligible level.” However, he confirmed that unknown parties controlled the wallet after the disclosure. The National Tax Service has not publicly detailed recovery efforts.

Bitcoin Custody Case in South Korea Deepens Scrutiny

In a separate case, South Korean police discovered that 22 Bitcoin seized in a 2021 hacking probe had disappeared. Investigators found the loss in February 2026 after reviewing cold wallet holdings stored in a Gangnam police vault. The missing Bitcoin had a market value of about $65,567 per coin at the time of reporting.

Authorities arrested two suspects on Thursday after tracing the wallet movements. Investigators determined that the coins were moved using a mnemonic phrase that police had never controlled. Officials confirmed that internal procedures failed to secure exclusive access to the seed phrase.

The incidents follow scrutiny over custody practices within public agencies. Regulators also continue a probe into Bithumb after a 620,000 BTC fat finger promotion error. The exchange briefly credited users with about $43 billion in non-existent Bitcoin before correcting the balances.

The Financial Services Commission extended its investigation after criticism over system oversight. Officials have not released final findings on the Bithumb case. Police continue to investigate the missing 22 Bitcoin and the circumstances surrounding the wallet control.