South Korean Police Lose Seized Crypto By Posting Password Online
Source: Slashdot
Background
South Korea’s National Tax Service seized crypto assets during recent enforcement actions against 124 high‑value tax evaders, confiscating holdings worth about 8.1 billion won (≈ $5.6 million). To showcase these efforts, officials issued a press release that included photographs of the seized Ledger hardware wallets along with handwritten notes displaying the wallets’ seed phrases.
Mistake
The high‑resolution photos published in the press release revealed the mnemonic recovery phrases, which serve as the master key for accessing the wallets. Possession of a seed phrase allows anyone to import the wallet into software or another hardware device and initiate transfers, effectively bypassing the offline cold‑storage protection of the Ledger devices.
Consequences
An unknown individual who saw the published images first added a small amount of Ether to one of the addresses to cover Ethereum network gas fees. They then executed three transfers, moving approximately 4 million Pre‑Retogeum (PRTG) tokens. At the time, those tokens were valued at about $4.8 million, though liquidating that amount would have been difficult due to market dynamics.