The major blunder by Seoul Police has been exposed. It is reported that 22 Bitcoins (worth about 2 billion won at the time, now worth several million dollars) seized in May 2022 were stolen while under police custody. The fact that this went unnoticed for several years until a recent audit indicates that this is not just a simple theft, but a symbol of systemic vulnerabilities within law enforcement agencies.

These Bitcoins, confiscated during a criminal investigation at Gangnam Police Station in 2021, should have been securely stored as evidence, but in reality, they were completely ignored in accordance with protocols set by the National Police Agency. Instead of being stored in a designated secure cold wallet, they were left in an unmanaged external cold wallet. Basic security measures such as multi-authorization by multiple officials and regular audits were also absent.

Currently, the Gyeonggi Northern Provincial Police Agency has taken over the investigation into this theft and has arrested two suspects on embezzlement charges. Multiple possibilities have been suggested regarding the method of theft, ranging from physical theft of hardware wallets, leakage of seed phrases, to insider involvement. The delayed discovery means that investigation has become more difficult, and it is highly likely that the perpetrators have evaded capture for a significant period.

Globally, this is one of the largest cases of cryptocurrency theft under police custody. Dr. Minji Park, a blockchain forensic expert at Seoul University, points out, “Police agencies worldwide are struggling with handling digital assets. Unlike physical evidence, cryptocurrencies require specialized technical knowledge, but many agencies lack both infrastructure and personnel.”

What this incident suggests is the reality that law enforcement’s response to rapidly evolving blockchain technology is falling behind. The gaps in technical knowledge, the lack of standardized protocols, and the absence of proper audit systems—all these factors combined make even police targets for theft.

The legal implications are also severe. The criminal cases relying on this evidence could be dismissed or result in reduced sentences. If victims were expecting asset recovery, those claims may now be lost. Above all, public trust in government institutions in the digital asset era is being shaken.

In response to this theft, South Korea’s National Police Agency is being pressured to overhaul its cryptocurrency guidelines. The introduction of multi-signature wallets, the development of real-time monitoring systems, enhanced training for law enforcement personnel, and the formulation of a nationwide unified protocol are all necessary.

As cryptocurrencies become increasingly integrated into both finance and crime investigation, authorities must build more robust systems. This incident involving Seoul Police should serve as an important lesson for law enforcement agencies worldwide. The ongoing investigation’s outcome will be a litmus test for how they confront the challenges of the digital asset era.