Korean Tax Office accidentally made wallet seed phrase public, suspected to have led to $4.8 million in crypto assets being transferred away

On February 27, according to South Korean media reports, the Korea National Tax Service mistakenly fully exposed the mnemonic phrase for a seized cryptocurrency wallet in a news release about “on-site searches of high-value and habitual tax evaders,” without any mosaic or obfuscation, leading to suspicions that hackers transferred related assets based on this information. The report states that on February 26, the National Tax Service released information indicating that during on-site searches of 124 tax delinquents, approximately 8.1 billion Korean won worth of assets were seized.

In “Case 3,” four hardware wallets were recovered from a drawer at a delinquent taxpayer’s residence. The problem was that in the accompanying on-site photos published with the press release, a paper containing the wallet recovery mnemonic was clearly visible next to the Ledger hardware wallet device. Blockchain explorer Etherscan records show that shortly after the mnemonic was exposed (early morning of the 27th), about 4 million PRTG tokens were transferred in three transactions to unknown addresses. Before the transfer, a small amount of ETH was sent to the address as gas fees. The assets transferred are estimated to be worth around $4.8 million (approximately 64 billion Korean won).

Scholars criticized this act as equivalent to “publicly revealing the wallet key,” exposing a fundamental lack of awareness among law enforcement agencies regarding digital asset security management.