How did South Korea's tax agency lose crypto assets?

The National Tax Service mistakenly published photos of hardware wallets with visible seed phrases, allowing an unknown individual to steal millions in cryptocurrency.

What was the value of the crypto stolen in South Korea?

Approximately $4.8 million worth of Pre-Retogeum (PRTG) tokens were stolen due to the leaked seed phrases.

Has South Korea experienced similar crypto security issues before?

Yes, in a previous incident in November 2021, police seized 22 bitcoin that were later stolen due to a leaked recovery phrase.

Home / Crime and Justice / Crypto Lost: Tax Agency's Seed Phrase Blunder

Crypto Lost: Tax Agency's Seed Phrase Blunder

2 Mar

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Summary

South Korea's tax agency accidentally exposed crypto seed phrases.
An unknown individual stole $4.8 million in crypto assets.
This incident highlights a lack of understanding of virtual assets.

Crypto Lost: Tax Agency's Seed Phrase Blunder

South Korea's National Tax Service (NTS) suffered a major security lapse when it mistakenly published photographs of hardware wallets with visible seed phrases in a press release. These photos, intended to showcase successful enforcement actions against 124 high-value tax evaders, inadvertently provided the master key to approximately $5.6 million worth of seized crypto assets.

An unidentified individual exploited this critical error by first funding an address with ether for gas fees. Subsequently, they transferred out roughly 4 million Pre-Retogeum (PRTG) tokens, valued at $4.8 million at the time. A Hansung University professor criticized the incident, stating it revealed the tax authorities' "basic lack of understanding of virtual assets" and resulted in substantial losses for the national treasury.