South Korea arrests two suspects in $1.5M Bitcoin evidence theft

South Korean authorities have arrested two suspects in connection with the theft of 22 bitcoins that had been held as evidence by the Gangnam Police Station, officials announced on Wednesday.

Suspects detained as South Korea police probe disappearance of seized Bitcoin

The digital assets, seized in November 2021 and valued at roughly ₩2.1 billion (about $1.5 million) at current market prices, were discovered missing during a nationwide audit of law enforcement’s virtual asset custody practices.

The Gyeonggi Northern Provincial Police Agency apprehended the two individuals on February 25, 2026, on suspicion of embezzling the Bitcoin (BTC) after it was held in connection with a criminal investigation that has since been suspended.

The audit was triggered following a separate high-profile incident in which 320 bitcoins went missing from the Gwangju District Prosecutors’ Office custody.

Investigators revealed that while the cold wallet device, a USB-based storage intended to secure the private keys, remained physically in police possession, the bitcoins it contained had been transferred out to an external address without authorization.

Police have not confirmed whether the stolen cryptocurrency has been recovered.

Authorities are tightening procedures for handling seized digital assets. New protocols to be introduced will include assigning dual custodians for wallets and sealing both hardware and recovery phrases, with plans to entrust assets to specialized custodians within the year.

A police official stated that steps will be taken to strengthen safeguards to prevent similar breaches going forward.

The arrests mark a significant escalation in the investigation into internal vulnerabilities related to law enforcement’s management of cryptocurrency evidence, prompting broader scrutiny and calls for overhauled digital asset custody standards.