(C) Sunday Times

The Gwangju District Prosecutors' Office is facing intense scrutiny following the disappearance of a significant amount of seized Bitcoin that was under its custody.

According to the prosecution on the 23rd, the loss was discovered last December during a routine audit of confiscated assets. The prosecution's preliminary investigation suggests that the loss was likely the result of a "phishing attack."

The missing Bitcoin was stored in a hardware wallet (a physical device similar to a USB). While Bitcoin exists on the decentralized blockchain, the hardware wallet contains the private keys required to access and transfer the funds.

Experts suggest two primary theories for the breach. The first is that an official may have connected the hardware wallet to a computer and inadvertently accessed a phishing site, leading to the theft of the private keys. Another possibility is the deliberate leakage of the keys or internal theft, given that the assets were managed in a shared environment.

Regardless of the exact cause, the prosecution is being criticized for its gross negligence. Not only were the high-value digital assets poorly managed, but the office also failed to notice the missing funds for more than six months.

The vanished Bitcoin is suspected to be part of the 320 BTC seized in 2021 from a family operating illegal gambling and private futures trading sites. At the time of the original investigation, approximately 1,400 BTC had already been diverted by suspects before police could secure them, leaving only 320 BTC to be transferred to the prosecution. Now, even that portion is missing.

"As the investigation is ongoing and we are focused on recovering the assets as quickly as possible, we cannot disclose specific details at this stage," a prosecution official stated.

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