Post by : Shakul

Seoul, South Korea: South Korea’s Deputy Prime Minister and Minister of Economy and Finance, Koo Yun‑cheol, has announced an urgent government review of how seized cryptocurrencies are managed by public institutions following a major security lapse by the National Tax Service (NTS). The error involved the accidental disclosure of a wallet’s recovery phrase in a press release, which allowed unauthorized access to seized digital assets.

The incident occurred when the NTS published official materials detailing enforcement actions against delinquent taxpayers. Photographs in the release included hardware wallets along with their mnemonic recovery phrases — a critical string of words that grants full access to a crypto wallet. Within hours after the leak, blockchain records showed that approximately 4 million Pre‑Retogeum (PRTG) tokens — nominally worth around $4.8 million — were moved out of the seized wallets.

In response, Minister Koo Yun‑cheol said the government, together with agencies including the Financial Services Commission and the Financial Supervisory Service, will inspect the status and management of all digital assets held by government bodies due to seizures. He emphasized that South Korea does not hold cryptocurrencies except those obtained during enforcement actions, and pledged to implement measures to prevent such lapses in the future.

The NTS incident has prompted broader scrutiny of public sector digital asset custody practices. South Korean authorities have faced multiple custody failures, including unrelated cases where seized Bitcoin was lost due to weak management of wallet credentials. Officials are now considering reforms including stricter protocols, security reviews, and possible outsourcing of custody to specialized firms to prevent future breaches.

Police are also investigating reports that someone gained access to the leaked crypto after seeing the exposed recovery phrase and later returned the tokens, though authorities are working to verify those claims through transaction records.

The controversy highlights the challenges governments face in securely handling digital assets, especially as blockchain technology and cryptocurrency enforcement expand. Analysts say robust custody standards and cybersecurity measures are critical as public institutions interact more with crypto assets seized during legal and tax enforcement actions.

#world news #Global News #Politics