South Korea's crypto blunders 🤦‍♂️

Two separate incidents have highlighted the challenges that officials face when dealing with crypto assets.

Author

Stephen Graves
February 27, 2026

📝 What you need to know

South Korean authorities are having a torrid time of it when it comes to crypto this week, with two separate incidents highlighting the challenges that officials face when it comes to digital asset custody.

The country’s National Tax Service managed to break the cardinal rule of crypto—”Not your keys, not your coins”—when it published a photo of hand-written seed phrases to celebrate an asset seizure. Unsurprisingly, some unidentified wag made off with some $4.8 million worth of crypto, before returning it to its original wallets.

The same day, police in Seoul announced the arrest of two suspects after losing more than $1.4 million in Bitcoin in 2022, after officers failed to follow proper custody procedures.

It caps off a month that’s seen South Korean regulators under scrutiny for failing to spot an internal flaw at Bithumb that saw the crypto exchange accidentally distribute some $135 million in Bitcoin to hundreds of users.

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