"Cho suggested that cops could have easily prevented the theft, likening posting any image of the mnemonic recovery phrase to leaving a wallet wide open. He noted that the original holder of the Ledger wallet was following best practices by only recording the phrase on a handwritten note and not storing the password online. Cops should have known to check the images for the recovery phrase, Cho said, and their mistake will likely cost the national treasury billions of won."
"It's possible that whoever took the cryptocurrency just seized on an opportunity after seeing the cops' failure to redact the images while scrolling through the National Tax Service's press releases at dawn. It's also possible that bad actors are closely monitoring South Korean police cryptocurrency announcements, following what The Block reported was 'a series of crypto custody lapses.'"
"The officials' best bet might be if the thief tries to move the stolen tokens through a regulated exchange, but The Block noted that the thief might struggle to convert that much cryptocurrency into cash under current market conditions. So seemingly, the thief, who likely wasn't expecting the big payday anyway, may be motivated to lie low and avoid major exchanges."
South Korea's National Tax Service experienced a significant cryptocurrency theft after inadvertently publishing images containing a mnemonic recovery phrase in a press release. The thief gained access to a Ledger wallet and stole tokens, with authorities having no clear suspects or straightforward method to recover the funds. While officials hope the thief might be caught attempting to convert stolen cryptocurrency through regulated exchanges, current market conditions may prevent such conversion. Security experts criticized the police for failing to redact sensitive recovery phrase images, noting this violated basic security practices. The incident reflects a broader pattern of cryptocurrency custody lapses among South Korean law enforcement, including previous incidents involving missing bitcoin in Gwangju and Seoul's Gangnam district.
#cryptocurrency-theft #law-enforcement-security-failure #wallet-recovery-phrase-exposure #south-korea-national-tax-service #digital-asset-custody
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