South Korea Tax Office Leaks Wallet Seed, Loses $4.8M

South Korea's National Tax Service accidentally exposed a wallet seed phrase in an official press release on Thursday, resulting in the theft of 4 million PRTG tokens valued at roughly $4.8 million. The agency's enforcement document included an unmasked image of a Ledger cold wallet alongside its full mnemonic phrase, allowing opportunistic actors to drain the associated address almost immediately, according to local media reports.

Unredacted Mnemonic Phrase Exposed in Official Document

The press release, which detailed the National Tax Service's campaign against tax delinquents and related asset seizures, reportedly contained a photograph of a Ledger hardware wallet alongside a sheet of paper showing the device's complete mnemonic phrase. No blurring or masking was applied to the image before publication, according to reports from Korean outlets including Naver and Chosun.

Blockchain analysts subsequently traced an Ether address linked to the leaked credentials. On-chain data for that address reveals three inbound transfers totaling 4 million PRTG (Pre-Retogeum), followed by a single outbound transaction sending exactly 4 million PRTG to a separate wallet. The pattern is consistent with a rapid drain of the compromised address shortly after the mnemonic became public.

How Severe Is the Damage From the Wallet Seed Leak?

Despite the $4.8 million headline figure, the real financial harm may be limited. Associate professor Jaewoo Cho of Hansung University's Blockchain Research Center analyzed the token flows and confirmed the theft on X on Friday. He stated that 4 million PRTG tokens worth approximately $4.8 million were stolen from the mnemonic disclosed through the NTS press release.

Cho added that other mnemonic phrases exposed in the same document did not appear likely to cause significant additional losses. He argued that because the stolen Pre-Retogeum tokens are difficult to cash out on existing markets, the actual damage sits at a negligible level. He expressed hope that the episode would serve as a catalyst for Korean public agencies to establish proper virtual asset custody systems.

We have confirmed that 4 million PRTG tokens, worth approximately $4.8 million, were stolen from the mnemonic that was leaked through a press release from the National Tax Service.

— Jaewoo Cho, Associate Professor, Hansung University Blockchain Research Center

Broader Crypto Custody Failures Across South Korean Agencies

The wallet seed leak arrives amid a widening pattern of crypto custody breakdowns within South Korean government bodies. In a separate incident disclosed in February 2026, police discovered that 22 Bitcoin seized during a 2021 hacking investigation had vanished from a cold wallet stored inside a Gangnam district police vault. Two suspects were arrested on Thursday after investigators determined the coins were moved using a mnemonic phrase that officers had never controlled.

Regulators face scrutiny over Bithumb's recent 620,000 BTC fat-finger promotion error, in which the exchange briefly credited users with approximately $43 billion in non-existent Bitcoin. The Financial Services Commission expanded its investigation after criticism that it failed to detect serious systems flaws at the platform earlier. Together, these incidents underscore mounting pressure on South Korean authorities to overhaul how they secure and audit digital asset holdings across law enforcement and regulatory agencies.