Two people have been arrested in South Korea after police lost 22 Bitcoin (about $1.4 million) that had been seized in 2021 and stored in a third-party cold wallet. The Gyeonggi Northern Provincial Police Agency is investigating multiple policy breaches that allowed the funds to be accessed by unauthorized parties and remain missing for four years.
The Bitcoin had been surrendered voluntarily following a hack of a local exchange in November 2021. Under long-standing station protocol, seized crypto should be kept in a cold wallet fully controlled by the police. Instead, the coins were placed in a cold wallet owned by a third party tied to the hacking case; that third party also had access to the wallet’s seed phrase. Police reportedly did not know the seed phrase.
Investigators say an official at a company with access to the seed phrase handed it to an individual known as “Mr. Jeong” under a borrowing agreement, after which the funds were moved under unclear circumstances. Two suspects have been arrested so far in relation to the disappearance.
Complicating the matter, an investigator involved in the original hacked-exchange case was sentenced in August 2025 on bribery charges for accepting money in exchange for a favorable investigation. The missing 22 BTC went undiscovered until a nationwide audit—prompted by the disappearance of 320 BTC in a separate case at the Gwangju District Prosecutors’ Office—flagged the discrepancy.
The case has raised questions about evidence-handling procedures for seized cryptocurrency and internal controls within police units responsible for digital-asset evidence. The Gyeonggi Northern Provincial Police Agency continues its probe.
