- South Korea’s National Tax Service accidentally published seed phrases in a press photo, revealing private wallet keys.
- An anonymous user subsequently drained three wallets of illiquid tokens worth $4.8 million at face value but returned them a day later.
- The Pre-Retogeum (PRTG) tokens were highly illiquid, making it impossible to realize anything close to their stated market value.
- This incident follows other recent crypto mishaps by South Korean authorities, including missing Bitcoin and a $43 billion exchange error.
South Korea’s National Tax Service (NTS) broke the cardinal rule of crypto this week by publicly sharing wallet seed phrases, enabling a swift digital heist. According to a report from Maeli Business Newspaper, the agency photographed the phrases during a seizure of assets from tax delinquents and included them in a press release.
An unidentified actor quickly accessed at least three wallets and transferred 4 million PRTG tokens to a new address. On-chain data shows these addresses, holding 40% of the token’s supply, had been dormant since January 2023. However, the stolen tokens were virtually unsellable due to extreme illiquidity on their lone listed exchange.
Consequently, the perpetrator returned all the tokens to their original wallets roughly 20 hours later. The PRTG token has minimal trading volume, and only $59 in sales would crash its price by 2%. Professor Cho Jae-woo of Hansung University criticized the blunder, stating, “This is like advertising to open your wallet and take your money.”
Meanwhile, this is the latest in a series of crypto custodial failures by South Korean officials. Authorities recently discovered $1.4 million in Bitcoin was lost four years ago due to improper police custody. Furthermore, regulators failed to detect an internal flaw at Bithumb that led to a mistaken $43 billion Bitcoin distribution earlier this month.
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