South Korea’s Deputy Prime Minister and Minister of Economy and Finance, Koo Yun-cheol, ordered a cross-agency review of how government bodies and public institutions manage seized digital assets after the National Tax Service (NTS) accidentally exposed a wallet seed phrase in a press release photo.
The NTS published an image of a hardware wallet showing the full recovery phrase, which allowed unknown actors to drain roughly 4 million Pre-Retogeum (PRTG) tokens — about 6 billion won (around $4.8 million) — from the confiscated wallet within hours.
In a post on X, Koo said the government, together with the Financial Services Commission and Financial Supervisory Service, will review the status and management of all digital assets seized from delinquent taxpayers and “promptly” strengthen security controls. He also emphasized that the state does not hold crypto beyond assets acquired through law enforcement actions.
The incident highlighted weaknesses in public-sector safeguards for seized digital assets. The NTS’s release of the full mnemonic recovery phrase effectively handed control of the wallet to anyone who viewed the image. Authorities have faced prior scrutiny over custody failures, including an alleged loss of 22 BTC by Seoul’s Gangnam police in a 2021 case after leaving seized funds with a third-party custodian.
The planned inspection aims to prevent recurrence of such incidents and to address broader vulnerabilities as officials move to tighten the country’s virtual asset oversight framework.
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