Officers in South Korea’s Gwangju District Prosecutors’ Office are investigating the disappearance of a “significant” amount of bitcoin seized in a criminal case, after an internal review flagged a possible loss during state custody, according to a translated version of a Yonhap News report on Thursday.
Per the report, prosecutors believe the bitcoin was lost around the middle of last year during the storage and management process, with a phishing incident cited as a likely cause.
Prosecutors declined to confirm the size or valuation of the missing holdings and declined to provide further details, citing the ongoing investigation, the report said.
The Gwangju District Prosecutors’ Office has previously handled large-scale crypto seizure cases. In March 2024, the office sought to recover roughly 170 billion won ($127 million) worth of bitcoin tied to an illegal gambling operation, according to a separate local report.
Legal framework for confiscation
The institutionalization of bitcoin confiscation in South Korea dates back to 2018, when the Supreme Court first ruled that cryptocurrencies are intangible assets with property value subject to the Criminal Procedure Act.
That landmark decision enabled the state to seize 191 BTC from a convicted child pornography website operator, an asset haul valued at approximately $2.3 million at the time. This ruling provided the legal mechanism for the state to treat digital tokens as “evidence or items subject to confiscation,” provided they are relevant to a criminal case.
Further expanding this reach, the Supreme Court issued a new ruling on Dec. 11 of last year, local media reported, confirming that bitcoin held on centralized exchanges such as Upbit and Bithumb is also subject to seizure.
The case stemmed from a January 2020 police seizure of over 55 BTC from an exchange account during a money laundering investigation, a move that was ultimately upheld after a series of appeals.
The court said bitcoin constitutes electronic information with independent economic value and is therefore subject to seizure by investigative authorities.
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