Crypto News: South Korea Liquidates 320 BTC After Bizarre Hack and Return Saga

Key Insights:

• Crypto news reports South Korea sold 320.8 BTC for $21.5M after a hacker returned funds stolen in a phishing attack.
• Authorities liquidated the recovered bitcoin in batches over 11 days and sent the proceeds to the treasury.
• Separate security lapses exposed missing BTC and leaked wallet phrases across government agencies.

According to the recent crypto news, South Korea has liquidated 320.8 Bitcoin after authorities recovered the funds from a phishing scam that had removed the assets from government control.

The sale raised roughly 31.6 billion won, equivalent to about $21.5 million, for the national treasury. The unusual sequence of events began with a criminal seizure, followed by a cyber theft, and ended with the hacker unexpectedly returning the funds.

The case now stands out in recent crypto news as a rare incident involving both a security breach and a recovery of government-held digital assets. Local media reports said the Gwangju District Prosecutors’ Office carried out the liquidation between Feb. 24 and March 6.

Officials sold the Bitcoin in batches over 11 days before transferring the proceeds to state coffers. However, the authorities confirmed that the funds originated from a seizure linked to an illegal gambling operation that converted criminal proceeds into bitcoin.

Crypto News: South Korea Liquidates 320 BTC After Recovery

The Bitcoin initially entered government custody during an investigation into an international gambling platform. The platform operated between 2018 and 2021 and allegedly hid illegal proceeds through crypto conversions.

Prosecutors seized the assets during the investigation and held them under government control. However, a security incident later interrupted the custody process.

Officials responsible for managing the digital assets were victims of a phishing website in August of 2025. The attackers gained access and transferred the seized bitcoin out of the government-controlled wallet.

Authorities did not learn of the breach immediately. Investigators later claimed that no one noticed the hack until December 2025.

The situation changed again when the hacker returned the stolen assets. According to crypto news, the prosecutors claimed that an unknown person sent 320.8 BTC back to the authorities’ wallet in February.

Officials then moved swiftly to block further transfers. To complete asset recovery, they restricted the wallet’s access to liquidation channels.

After securing the money, prosecutors proceeded with liquidation. The office gradually sold off Bitcoin across multiple transactions over the 11-day period.

After the sales were over, authorities handed the sum total over to the national treasury. According to the disclosure, the liquidation resulted in about 31.6 billion won, or about $21.5 million.

Crypto News: South Korea Bitcoin Seizure Recovery Case | Source: X

Security Failures Raise Questions for Crypto Regulation

The Gwangju case appears alongside other recent incidents involving South Korean agencies handling digital assets. These events have drawn attention in ongoing crypto news discussions surrounding operational security and crypto regulation.

A separate internal review uncovered another missing cryptocurrency case within law enforcement. Authorities reported that the Seoul Gangnam Police Station lost 22 bitcoin stored in a USB cold wallet.

Officials said the loss dates back to 2021. Investigators noted that the physical cold wallet remained in place, which raised the possibility of internal involvement.

The National Tax Service also suffered a security lapse involving digital assets. The agency accidentally leaked a crypto wallet recovery phrase in a publicly released report.

After the disclosure, an unknown actor moved 4 million Pre-Retogeum (PRTG) tokens from the wallet. The tokens had a theoretical value of approximately $4.8 million.

Following the report, authorities confirmed that the funds were sent to an unidentified address after the phrase went public. Officials have not announced whether or not investigators were able to trace the destination wallet.

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