South Korean police are investigating how 22 Bitcoin, worth roughly $1.4 million, that were seized in 2021 went missing after being stored in a third-party cold wallet. The Gyeonggi Northern Provincial Police Agency has opened a probe into multiple breaches of procedure that allowed unauthorized access and left the funds unaccounted for for about four years.
The coins were surrendered voluntarily following a November 2021 hack of a local exchange. Under established station rules, confiscated crypto should be retained in a cold wallet fully controlled by police. Instead, the Bitcoin were placed in a cold wallet owned by a third party connected to the hacking case. That third party also had access to the wallet’s seed phrase; police say they never held the seed phrase themselves.
Investigators report that an official at a company with access to the seed phrase passed it to an individual known as Mr. Jeong under a so-called borrowing agreement. After that transfer, the funds were moved under circumstances that remain unclear. So far two suspects have been arrested in connection with the disappearance.
The missing Bitcoins were only discovered during a nationwide audit prompted by the disappearance of 320 BTC in a different case at the Gwangju District Prosecutors’ Office. The audit revealed the discrepancy, and investigators have been tracing how and when the coins left police custody.
The situation is further complicated by the fact that an investigator who worked on the original hacked-exchange case was sentenced in August 2025 for accepting bribes in exchange for a favorable probe. That conviction has heightened scrutiny of how evidence and digital assets were handled.
The affair has raised broader concerns about protocols for storing seized cryptocurrency and the internal controls within units responsible for digital-asset evidence. The Gyeonggi Northern Provincial Police Agency says its investigation is ongoing as authorities seek to recover the funds and determine who is responsible for the lapses that led to the loss.