South Korea investigates seed phrase leak in photo leading to $4.8 million crypto theft from tax authority

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email South Korea investigates seed phrase leak in photo leading to $4.8 million crypto theft from tax authority The National Tax Service said it had intended to provide a vivid shot of the seizure by sharing a photo. By Olivier Acuna | Edited by Sheldon Reback Mar 2, 2026, 1:05 p.m. Make us preferred on Google National Tax Services office in South Korea. (Minseong Kim-Wikimedia Commons/Modified by CoinDesk) What to know : South Korea's National Tax Service lost about $4.8 million in seized cryptocurrency after publicly sharing a photo that exposed hardware wallet seed phrases. The incident is the country's second major loss of seized crypto, following a 2021 case involving 22 BTC held by police. Authorities have asked police to help recover the stolen funds and pledged an external security review. South Korean tax authorities lost $4.8 million of seized crypto after displaying the relevant wallets' seed phrases in a photograph covering the Feb. 26 event. The crypto was taken immediately after the National Tax Service (NTS) shared a photo that included hardware wallets and their secret phrases. The service apologized for the incident, Asia Business Daily reported on Sunday. "In an effort to provide more vivid information, we did not realize that sensitive information was included and carelessly provided the original photo," the tax office said. "This is entirely the fault of the National Tax Service (NTS), with no excuse." This is at least the second time something like this has occurred in the country. South Korean authorities faced scrutiny over a separate failure in which Seoul’s Gangnam police allegedly lost 22 BTC (roughly $1.5 million) in a 2021 hacking case after leaving the funds and seed phrase with a third-party custodian. The authors of that theft were recently detained. The new case involves a taxpayer who owed the NTS capital gains tax, which led to the individual’s home being raided. The authorities took control of at least four hardware wallets and cash. They then photographed the seized items, which included at least two seed phrases, and shared the unblurred photo publicly.. The NTS requested police intervention to recover the stolen cryptocurrency. The tax authority also revealed plans to conduct an external review of its overall security system and to overhaul the entire manual for the process from the seizure to the sale of virtual assets. Koo Yun-cheol, South Korea’s deputy Prime Minister and Minister of Finance and Economy, confirmed the leak in an X post on Sunday. Koo said several government agencies, including the Financial Services Commission and the Financial Supervisory Service would investigate the leak. He also said they would scrutinize how government agencies and public institutions seize and manage digital assets to prevent recurrence. South Korea Passwords Crypto Leaks Theft More For You Bitcoin losing trillions in value hasn't stopped traditional giants' interest in digital assets sector By Helene Braun | Edited by Stephen Alpher 19 hours ago At the iConnections conference in Miami this week, allocators signaled digital assets are now a core sleeve in alternatives. What to know : Institutional interest in digital assets remains hot with this year's iConnections conference hosting more than 75 digital asset funds and about 750 meetings between managers and allocators. Nearly a quarter of limited partners on the iConnections platform now express interest in digital asset strategies, data shows, signaling that crypto has become a mainstream sleeve within alternative investments, led by family offices. While bitcoin is seen as having achieved institutional legitimacy, broader adoption of altcoins remains constrained by regulatory uncertainty, iConnections CEO Ron Biscardi said. Read full story Latest Crypto News Anthony Pompliano’s ProCap Financial buys 450 bitcoin, steps up share buybacks 4 minutes ago Battered bitcoin could find solace in war-led 'debasement' trade 52 minutes ago Bitcoin outperforms equities in risk-off session as Iran conflict enters third day 1 hour ago U.S. equity futures fall in pre-market trading as oil, gold retreat from highs 2 hours ago Hong Kong links up with Shanghai trade authorities to put cargo data on blockchain 3 hours ago Riot Platforms, Core Scientific earnings, U.S. jobs report: Crypto Week Ahead 3 hours ago Top Stories SpaceX’s $780 million bitcoin stack now down to about $545 million ahead of IPO filing Mar 1, 2026 Polymarket attracts record trading 'world' volumes as U.S.-Iran bets top $529 million Mar 1, 2026 Iran crisis puts the regime's $7.8 billion crypto shadow economy in spotlight Feb 28, 2026 Hyperliquid's HYPE token jumps 5% as Iran war brings windfall revenue, JUP gains on supply freeze 8 hours ago Strategy lifts STRC dividend to 11.5% as MSTR extends monthly losing streak to 8 20 hours ago The 'stablecoin sandwich' is dead: Why the next phase of crypto payments is all about the user relationship Feb 28, 2026