$21M In Stolen Bitcoin Recovered After Hacker Returns Funds To South Korean Authorities ⋆ ZyCrypto

A hacker has reportedly returned $21 million worth of Bitcoin that was previously stolen from the custody of South Korean government authorities, according to local reports. 

The Gwangju District Prosecutors’ Office disclosed the surprising recovery of 320.8 Bitcoin — valued at roughly $21.3 million at current prices — according to local media, The Chosun Daily. Prosecutors confirmed that a mysterious hacker returned the stolen cryptocurrency to the authorities’ wallet on Tuesday, after which it was transferred to a secure domestic digital exchange wallet under official control for safekeeping.

Last December, officials at the Gwangju District Prosecutors’ Office found that Bitcoin confiscated during a gambling site raid had vanished. A subsequent internal probe revealed the loss occurred in August when investigators were tricked by a phishing website and mistakenly submitted their recovery seed phrases. Such phishing attacks remain prevalent, primarily because cryptocurrency systems operate on decentralized networks where transactions cannot be reversed once completed.

Although the details remain unclear, prosecutors said they had contacted local cryptocurrency exchanges to freeze the hacker’s wallet, limiting the ability to move or cash out the looted Bitcoin. Authorities did not provide an explanation for the return of the funds.

South Korean authorities stated that the investigation remains ongoing as officials work to identify the individual behind the incident and analyze the phishing websites and harmful domains associated with the breach.

“We will pursue the suspect regardless of the Bitcoin recovery,” the prosecutors’ office said in a statement to Digital Asset Works.

The incident has triggered a broader nationwide review of how investigative agencies securely manage confiscated digital assets. Recent findings also indicated that the Seoul Gangnam Police Station lost oversight of 22 Bitcoins held in a cold wallet, with the assets reportedly unaccounted for since 2021. 

The Gyeonggi Bukbu Provincial Police Agency has initiated a fresh investigation aimed at identifying those connected to the Bitcoin transfer and also examine the possibility of insider involvement.