South Korean Government Liquidates $21.5M Worth of Reclaimed Bitcoin Following Security Incident
Government officials liquidated the reclaimed Bitcoin through incremental sales spanning 11 days to prevent market volatility, local news sources confirm.
Prosecutors in South Korea have liquidated 320.8 Bitcoin that were reclaimed following a phishing attack that briefly took the cryptocurrency out of state control.
According to a Tuesday report by The Chosun Ilbo, the Gwangju District Prosecutors' Office confirmed it liquidated 320.8 Bitcoin (BTC) at prevailing market rates and deposited 31.59 billion Korean won (approximately $21.5 million) into the national treasury.
To prevent causing disruptions to market stability, authorities conducted the Bitcoin sales incrementally through small portions over an 11-day period spanning from Feb. 24 through March 6, according to reports.
The cryptocurrency in question had initially been confiscated from an individual suspected of running an unlawful gambling platform that purportedly processed approximately 390 billion won ($285 million) worth of bets during the period from 2018 through 2021.
Bitcoin lost in a phishing attack was returned earlier this year
During a custody transfer process in August 2025, prosecutors allegedly learned that the digital currency had been compromised when asset administrators fell victim to a fraudulent phishing website. Subsequently, the assets were tracked down to a wallet controlled by the hacker.
Following requests from authorities to both domestic and international cryptocurrency exchanges to freeze the wallet address, which complicated efforts to liquidate the stolen assets, the Bitcoin was returned to a wallet under government control on Feb. 17.
According to the Gwangju District Prosecutors' Office statement on Feb. 19, the individual responsible for the hack unexpectedly returned 320.88 Bitcoin, which authorities subsequently moved to a protected exchange wallet under their supervision.
South Korean courts rethink crypto losses in debt restructuring cases
Separately in South Korean cryptocurrency developments, judicial authorities are reportedly reassessing their approach to handling cryptocurrency-related obligations in personal rehabilitation proceedings.
Based on a Sunday report published by local news source EToday, recently formed rehabilitation courts located in Daejeon, Daegu and Gwangju are developing new guidelines that would typically exclude losses from stock and cryptocurrency investments from liquidation value assessments.
This policy adjustment would categorize crypto investment losses similarly to conventional asset losses instead of speculative obligations, which could potentially reduce repayment requirements for people participating in court-supervised debt restructuring processes, according to EToday's reporting.