South Korea’s National Tax Service apologized on Wednesday for a security breach that exposed cryptocurrency worth 6.9 billion won ($4.8 million) to theft. “We deeply apologize to the public,” the agency said in a statement. “During a briefing on the seizure of a tax delinquent’s assets on January 26, sensitive cryptocurrency information was inadvertently leaked.” The agency had distributed a press release announcing the seizure of four cold wallet USB devices containing a tax delinquent’s cryptocurrency.
The release mistakenly included images showing the “mnemonic code”—a master key that enables access to digital wallets. Shortly after, approximately $4.8 million worth of cryptocurrency was allegedly drained from the exposed wallets. “This incident occurred because we failed to recognize that the original photos contained sensitive cryptocurrency information while trying to provide more vivid details to the public,” the agency said. “There is no excuse. This is entirely our fault.”
The tax agency said it is working to recover the stolen assets. Upon discovering the unauthorized transfers, it immediately began tracking the funds using its cryptocurrency tracing program and referred the case to the National Police Agency. The agency pledged to conduct an external security audit, strengthen internal controls including pre-release reviews to prevent future leaks of sensitive information, overhaul procedures for seizing, storing, and selling cryptocurrency, and enhance staff training on security protocols. “Deputy Prime Minister and Finance Minister Koo Yun-cheol said on social media platform X that the government would work with the Financial Services Commission and Financial Supervisory Service to review how government agencies manage seized digital assets.”
“We will promptly establish and implement measures to prevent recurrence, including strengthening digital asset security management,” Koo said. Police have opened a preliminary investigation following the tax agency’s referral. If suspects are identified, they could face charges including violations of the Information and Communications Network Act and aggravated fraud under the Act on the Aggravated Punishment of Specific Economic Crimes.
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