Crypto Operator Arrested for Stealing 22 Police BTC

The Uijeongbu District Court issued an arrest warrant for the suspect, identified only as “A,” on charges of violating the Information and Communications Network Act and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. A report from Yoo Joo-hee stated the court approved the warrant citing a risk of flight and evidence destruction. The suspect, a man in his 40s, is accused of illegally transferring the 22 BTC from the custody of the Gangnam Police Station in Seoul.

The Bitcoin in question was originally submitted to the Gangnam Police Station as part of a hacking investigation initiated in 2020. The suspect’s own cryptocurrency company had reported that its coins were compromised, and the 22 BTC were voluntarily turned over to authorities as evidence. The funds were stored in a cold wallet, a physical USB-like device designed for offline storage.

Investigators claim the theft occurred in May 2022. The suspect allegedly did not need physical possession of the device, instead using the wallet’s mnemonic code—a secret recovery passphrase—to gain access and transfer the assets. The stolen Bitcoin was reportedly converted into approximately 1 billion won (about $730,000) and spent by the suspect.

The case is expected to proceed to the next stage of the legal process shortly. A police official stated, The investigation is mostly complete. We plan to refer the case to prosecutors once additional questioning is finished. The timeline for the formal indictment and subsequent trial has not been announced.

This incident highlights critical security principles for managing digital assets. Crypto holders can review the following security measures:

• Secure Mnemonic Phrases: Never store a recovery phrase digitally or in the same location as the hardware wallet it secures. Treat the phrase as the ultimate master key.
• Understand Wallet Recovery: Realize that anyone with access to your mnemonic phrase has complete control over your funds, regardless of who holds the physical device.
• Verify Handover Procedures: When providing assets or security keys to a third party, including law enforcement, ensure clear protocols and documentation are in place regarding control of all access methods.