South Korean police have arrested two suspects in connection with the loss of approximately $1.4 million worth of Bitcoin. Officers at the Gangnam Police Station in Seoul failed to follow proper custody guidelines after confiscating 22 Bitcoin in 2021. Instead of securing the cryptocurrency in their own cold wallet, they allowed a third-party to manage it without possessing the necessary seed phrase.
The failure to maintain control over the digital assets resulted in the funds being lost in 2022. The issue came to light during a broader review by the Gwangju District Prosecutors' Office, which uncovered a separate case involving missing Bitcoin valued at $21 million. The Gyeonggi Northern Provincial Police Agency is now investigating the circumstances of the Bitcoin leak. Reports suggest a member of the original hacking investigation team was indicted on bribery charges last year, with the third-party firm allegedly offering bribes to influence the investigation.