Police Mistake Lets Bad Guys Grab Millions in Crypto

The South Korean National Tax Service (NTS) recently announced the seizure of over $5 million in cryptocurrency from a group of affluent tax evaders.
In an effort to highlight the operation, officials posted images that included a handwritten recovery phrase beside a Ledger cold‑wallet.
The phrase is the master key that unlocks all coins on the device, and it was clearly visible in the screenshots.

How the Heist Unfolded

1. The Slip‑Up – The recovery phrase was inadvertently shared in the public release.
2. The Opportunist – A thief spotted the mistake, deposited a small amount of ETH to cover transaction fees, and executed three separate transfers.
3. The Loot – Roughly 4 million PRTG tokens (≈$4.8 million) were moved out of the wallet.

Immediate Aftermath

• The press release was taken down once the error became public.
• Local media and tech sites had already disseminated screenshots.
• A blockchain analyst noted that anyone who saw the images could have carried out the theft; no suspect has been identified.

NTS Response

• The agency apologized for the lapse and announced a police investigation to recover the funds.
• Officials warned that converting such a large amount of crypto into cash is difficult under current market conditions, suggesting the thief may keep the coins hidden rather than sell them on regulated exchanges.

Lessons Learned

• Avoidable Error – The original owner had followed best practices by writing the recovery phrase on paper and keeping it offline.
• Police Oversight – The police failed to verify the presence of the key before publishing.
• Potential Losses – The mistake could cost the national treasury billions of won.
• Pattern in South Korea – Similar incidents have occurred before, with police losing seized Bitcoin.

Moving Forward

The Tax Service claims it is tightening internal controls and providing additional training to prevent future leaks.