South Korean authorities have arrested two suspects in connection with the theft of 22 bitcoins held as evidence by the Gangnam Police Station, officials said Wednesday.
Suspects arrested as South Korean police investigate disappearance of seized Bitcoin
The digital assets, seized in November 2021 and valued at approximately 2.1 billion yen (about $1.5 million) at current market prices, were discovered missing during a national audit of law enforcement’s virtual asset custody practices.
North Gyeonggi Provincial Police apprehended the two individuals on February 25, 2026, on suspicion of embezzlement of Bitcoin (BTC), after their detention in connection with a criminal investigation that has since been suspended.
The audit was triggered following another high-profile incident in which 320 bitcoins disappeared from the Gwangju District Prosecutor’s Office.
Investigators revealed that although the cold wallet, a USB storage device intended to secure private keys, remained physically in police possession, the bitcoins it contained were transferred to an external address without authorization.
Police have not confirmed whether the stolen cryptocurrency has been recovered.
Authorities are strengthening procedures for processing seized digital assets. New protocols to be introduced will include the appointment of two custodians for the wallets and the sealing of material and recovery conditions, with plans to entrust assets to specialist custodians during the year.
A police official said steps would be taken to strengthen safeguards to prevent similar violations from happening again.
The arrests mark a significant escalation in the investigation into internal vulnerabilities related to law enforcement’s handling of cryptocurrency evidence, prompting further scrutiny and calls for an overhaul of digital asset custody standards.