A seed phrase leaked in a South Korean Tax Agency press release allowed hackers to steal $4.8 million

Traders Union
All News
Crypto
A seed phrase leaked

Highlights

South Korea’s tax agency exposed a crypto wallet seed phrase in a press release.
Hackers stole $4.8 million in PRTG tokens within minutes of publication.
Incident underscores urgent need for secure government crypto custody systems.

An unprecedented incident

According to Cointelegraph, citing local media, the National Tax Service released a statement during an event highlighting its success in combating tax evasion. The press release included an image of a Ledger cold wallet alongside a sheet of paper displaying the full mnemonic seed phrase — without any blurring or redaction.

Once the document was published online, malicious actors quickly accessed the information and transferred the wallet’s contents to another address within minutes. The funds were then moved through several additional transactions to obscure their trail.

Loading...

The tweet was deleted by the author.

But we saved everything 🙂.

“We confirmed that 4 million PRTG tokens, worth approximately $4.8 million, were stolen using the mnemonic phrase that was disclosed in the National Tax Service’s press release,” wrote Associate Professor Jaewoo Cho of the Hansung University Blockchain Research Center on X after analyzing blockchain data flows.

Cho noted that because the stolen tokens are difficult to liquidate, the actual financial damage may be limited due to token freezing mechanisms. He also expressed hope that the episode would become a “hidden blessing,” prompting Korean government agencies to establish proper digital asset custody systems.

When reputational damage exceeds financial loss

South Korean law enforcement authorities have previously faced criticism over improper storage of confiscated crypto assets. As recently as February, police discovered that 22 bitcoins (BTC), seized during a 2021 hacking investigation, had disappeared from a cold wallet stored at the Gangnam Police Station vault.

The latest incident clearly demonstrates how simple negligence or lack of expertise can erase the reputational capital built by government agencies in their fight against tax evasion. What was meant to showcase enforcement success instead resulted in financial and reputational harm, highlighting the growing gap between the rapid evolution of the crypto market and institutional readiness to regulate it.

Without systemic modernization of custody procedures, transparent standards, and professional digital asset expertise, similar mistakes risk undermining public trust in government governance in the era of digital finance.

As we wrote, Two arrested in South Korea after 22 Bitcoin disappear from police station

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.