South Korea’s tax office leaks wallet seed and loses $4.8M in seized tokens

South Korea’s National Tax Service (NTS) accidentally exposed a crypto wallet seed phrase in an official press release on Thursday, leading to the loss of 4 million PRTG  (Pre‑Retogeum) tokens worth roughly $4.8 million, from the address, according to local media reports.

According to multiple Korean media reports on local sites Naver, Chosun and others, the press release related to the National Tax Service’s enforcement campaign against tax delinquents and seizures that the authorities had carried out. The release reportedly included an image of a Ledger cold wallet and a sheet of paper showing the wallet’s full mnemonic phrase without any blur or masking.

South Korea’s National Tax Service reveals seed phrase. Source: Naver

Blockchain researchers later identified an Ether (ETH) address linked to the leaked phrase that briefly held the 4 million PRTG tokens before the entire balance was transferred out. 

Onchain data for that address shows three inbound transfers totalling 4 million PRTG, followed by a single outbound transfer sending exactly 4 million PRTG to another wallet, consistent with those reports. 

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Associate professor Jaewoo Cho of Hansung University’s Blockchain Research Center, who analyzed the flows, noted on X on Friday, “We have confirmed that 4 million PRTG tokens, worth approximately $4.8 million, were stolen from the mnemonic that was leaked (disclosed) through a press release from the National Tax Service.”

He added that, “fortunately, the other exposed mnemonics do not seem likely to cause any major issues,” and argued that because the stolen tokens were difficult to cash out, “the actual damage is at a negligible level.”

He said he hoped the episode would be a “blessing in disguise” that pushed Korean public bodies to build proper virtual asset custody systems. 

Crypto custody failures test Korean authorities

The incident comes as South Korean authorities face another crypto custody scandal. In a separate case, police discovered in Feb. 2026 that 22 Bitcoin (BTC) seized in a 2021 hacking investigation had vanished from a cold wallet stored in a Gangnam police vault.

Two suspects were arrested on Thursday after investigators found that the coins had been moved using a mnemonic phrase that the police had never controlled. 

Separately, regulators are under pressure over Bithumb’s recent 620,000 BTC fat finger promotion error, where the exchange briefly credited users with about $43 billion in non‑existent Bitcoin, and the Financial Services Commission extended its probe after criticism that it failed to spot serious systems flaws earlier.

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