South Korean tax authorities have lost $4.8 million in seized cryptocurrency after a photograph shared by the National Tax Service (NTS) inadvertently revealed the seed phrases for the relevant wallets. The theft occurred immediately after the NTS posted the image, which included hardware wallets and their secret recovery phrases.
The tax office issued an apology, admitting fault for including sensitive information in an effort to provide more vivid details. This incident marks the second such occurrence in South Korea, following a previous case where Seoul's police allegedly lost BTC after entrusting funds and a seed phrase to a third-party custodian.
The latest case involved a taxpayer who owed capital gains tax, leading to a raid where authorities seized hardware wallets and cash. The NTS has requested police intervention to recover the stolen assets and announced plans for an external review of its security systems and an overhaul of its virtual asset management procedures.
Koo Yun-cheol, South Korea's Deputy Prime Minister and Minister of Finance and Economy, confirmed the leak and stated that several government agencies, including the Financial Services Commission and the Financial Supervisory Service, will investigate. The probe will also scrutinize how government bodies manage digital assets to prevent future incidents.
