Lost Bitcoin case exposes crypto custody gaps in law enforcement

[AIcash]

The disappearance of seized Bitcoin from South Korea’s Gwangju District Prosecutors’ Office is drawing attention to weaknesses in how law enforcement handles digital asset custody.

Experts note that improper seizure procedures — such as failing to transfer funds to a secure custody wallet — could allow original owners to reclaim assets using backup private keys. Other risks include generating wallets on internet-connected computers or storing private keys on networked devices, both of which expose assets to theft.

The suspected phishing incident also highlights gaps in security training and access controls. As crypto becomes more common in criminal cases, authorities face growing pressure to adopt custody standards that match the technical demands of digital assets rather than relying on traditional evidence-handling practices.

[nihalsari]

losing seized bitcoin via phishing is… incredibly on brand for government opsec