Finance Minister Demands Probe Into Missing 22 BTC and Bithumb Error

Loss of 22 BTC and a $40B exchange error drive South Korea to tighten oversight of seized crypto assets nationwide.

South Korea has ordered an urgent review of how public agencies manage seized crypto assets. The move follows the loss of 22 Bitcoin by police in Seoul and a major accounting error at Bithumb. Officials admit recent lapses exposed weak custody controls across state bodies. 

South Korea Reassesses State Crypto Handling After Security Lapses

Mounting pressure over missing crypto has pushed Seoul’s top finance official into action. Deputy Prime Minister and Finance Minister Koo Yun-cheol ordered a full inspection of how digital assets are stored and supervised across public institutions. The review will cover assets obtained through seizures, tax enforcement, and criminal probes.

Koo said agencies such as the Financial Services Commission and the Financial Supervisory Service will join the inspection. These authorities will assess how agencies store, control, and record seized crypto.

In a statement posted on X, the finance minister pledged swift steps to tighten digital asset security. 

Momentum for reform gathered after reports revealed that Gangnam police lost access to 22 BTC in 2022. Holdings were valued at roughly $1.4 million at the time. Officers handed control of the seized assets to a third-party firm, failing to retain the private keys and violating custody guidelines.

What began as a quiet custody failure has turned into a public controversy. Authorities only disclosed the loss of 22 BTC recently, triggering sharp criticism. Meanwhile, prosecutors have arrested two suspects and are investigating possible bribery linked to the case.

At the same time, a controversy involving the crypto exchange Bithumb emerged. An internal system flaw reportedly credited users with billions of dollars’ worth of Bitcoin by mistake. The estimated value of the error reached nearly $40 billion before it was corrected.

Regulators faced criticism for failing to detect the issue earlier. The incident added pressure on financial watchdogs to tighten supervision of digital asset platforms and state holdings.

Koo Rules Out State Crypto Holdings as Reform Talks Intensify

Finance Minister Koo further clarified that the government does not hold digital assets as investments. He added that the state only possesses crypto acquired through legal enforcement actions. These include tax seizures and criminal investigations.

Moreover, recent failures exposed clear weaknesses in how public agencies manage digital assets. Crypto storage requires strict custody standards and technical controls. Weak oversight can lead to irreversible losses.

Koo’s remarks signal that those risks are acknowledged at senior levels of government. Ongoing investigations may shape the next phase of reform, as findings could result in stricter rules.

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