Prosecutors who lost seized cryptocurrency worth tens of billions of won are looking into whether the investigators involved were negligent in their duties. With poor internal management cited as the cause, there is talk that the findings could lead to disciplinary action or even criminal liability.
The Gwangju District Prosecutors' Office said on the 28th that it is conducting an internal audit of five investigators in connection with the lost bitcoin seizure. They were the investigators in charge of managing the seized items.
According to prosecutors, the investigators, during a handover of duties in Aug. last year, accessed a phishing site and had 320 bitcoins—criminal seizure items—stolen. At current prices, that is about 40 billion won.
At the time, the investigators tried to check the number of bitcoins stored in a USB-type hardware wallet by going online, but it was found that they accessed a phishing site they mistook for the official site.
The problem is that further gaps surfaced in the subsequent management process. In monthly inspections of seized items, the investigators did not verify the actual bitcoin holdings and only checked the physical presence of the hardware wallet.
As a result, prosecutors only realized recently, while proceeding with the process to recover the funds to the treasury, that the bitcoins were already gone.
Prosecutors have collected mobile phones and other devices from the investigators and are conducting an internal audit, and plan to take follow-up measures, such as disciplinary action, if negligence in duty is confirmed. If criminal suspicions emerge during the audit, it could be converted into a formal investigation.
Prosecutors believe the bitcoin theft itself was carried out by an outsider and said that no signs of internal collusion have been confirmed so far. Separately, an investigation to track the thief, including executing search warrants, is underway.
A prosecution official said, "We will thoroughly investigate the exact circumstances, do our best to apprehend the thief who took the seized items, and recover the bitcoins," adding, "We will review the overall management of seized cryptocurrency and improve any institutional shortcomings."