Two people have been arrested in connection with the loss of 22 Bitcoins (BTC) seized by police in South Korea, currently worth approximately $1.48 million. The investigation by the Gyeonggi North Provincial Police Agency revealed that the BTC was stored in a cold wallet belonging to a third party, and the police did not know the wallet’s seed phrase. This highlights a serious breach of long-standing security protocols.
Details of South Korea’s 22 BTC Loss
In 2021, following a hack of a local exchange, the voluntarily surrendered 22 BTC was transferred to a third-party wallet linked to the hack case. According to Dong-A Ilbo newspaper, the seed phrase was lent by a company official to a person named ‘Mr. Jeong’. Four years later, this violation was discovered during a national audit following a separate 320 BTC loss case at the Gwangju District Prosecutor’s Office. Among the arrested are those who provided access to the seed phrase.
Cold Wallet and Seed Phrase Security Breach
Cold wallets protect BTC from hacks with offline storage, but the seed phrase (12-24 words) is the wallet’s key. According to protocol, police should hold assets in escrow wallets without access to the seed phrase. In this case, lending the seed phrase bypassed multi-signature (multi-sig) protocols. Experts say this is a typical example of seed phrase backup errors emphasized in tools like hardware wallets and BTC detailed analysis.
Background of the 2021 Exchange Hack
The 2021 hack shook South Korea’s crypto ecosystem. The voluntarily surrendered BTCs were moved to third-party wallets during the judicial process. Access was provided via seed phrase, but the protocol violation went unnoticed. Similar cases recall the Upbit and Bithumb hacks.
Bribery Crime and National Audit Results
The police officer conducting the hack investigation was convicted of bribery in August 2025. This paved the way for the incident to explode during the national audit. The 320 BTC loss in Gwangju was the trigger; the total potential loss amounts to millions of dollars.
BTC Technical Analysis: Current Support and Resistance Levels
BTC price is currently at 67.480,97 USD, 24-hour change -%0,81. RSI 42,25 (neutral), trend downtrend, Supertrend bearish. EMA 20: 69.064 USD.
| Level | Price (USD) | Score | Distance | Sources |
|---|---|---|---|---|
| S1 Support | 67.554,76 | 57/100 | -0,32% | Pivot, Prev Close, MACD |
| S2 Support | 62.869,19 | 57/100 | -7,23% | POC, Keltner |
| R1 Resistance | 68.866,26 | 81/100 ⭐ | +1,62% | Swing High, Fibo |
| R2 Resistance | 78.916,54 | 67/100 ⭐ | +16,45% | SMA 50 |
BTC PERP rose %8,40 from the 62.401 USD low, turning weekly positive. Watch BTC futures.
Crypto Security Lessons and Market Impact
While institutional moves like GD Culture Group’s 7,500 BTC reserve increase, this scandal reminds of individual/civil security risks. Investors should use multi-sig and hardware wallets. Despite the news, BTC is in a downtrend; a breakout above R1 68.866 USD could bring recovery.
Source: https://en.coinotag.com/22-btc-lost-in-south-korea-seed-phrase-scandal
