Seoul Gangnam Police Lose 22 BTC from Seized USB Cold Wallet — Probe Underway
South Korea’s Gangnam Police Station reported 22 BTC (≈$1.45M) missing from a USB cold wallet seized in a 2021 investigation. The physical USB device remained in police custody but auditors discovered the coins had been transferred remotely during a nationwide digital-asset custody audit on 13 February 2026. Authorities say there was no sign of physical tampering; the Gyeonggi Bukbu Provincial Police Agency opened an internal probe to determine whether the breach resulted from external hacking, internal negligence or procedural lapses. This follows a larger January incident in which the Gwangju District Prosecutors’ Office lost 320 BTC after staff accessed a phishing site and credentials were compromised. Both cases involved USB/hardware wallets and verification failures, pointing to systemic custody weaknesses — possible owner backups, key exposure when wallets were created on internet-connected machines, or poor credential handling. Regulators including the Financial Supervisory Service have proposed stricter IT-risk rules, AI monitoring and fines to tighten digital-asset custody standards. For traders: the incident highlights institutional custody risks for seized coins, potential increases in regulatory scrutiny and demand for professional custodians and multi-signature/HSM solutions. Primary keywords: South Korean police, 22 BTC, seized assets, crypto custody. Secondary keywords: USB cold wallet, hardware wallet, custody failure, multi-signature, HSM.
Bearish
The loss of 22 BTC from a seized USB cold wallet—especially coming shortly after the 320 BTC Gwangju loss—creates negative sentiment specifically for Bitcoin among traders. Short-term effects: increased selling pressure or reduced appetite for risk as market participants factor in institutional custody failures and potential uncertainty about the availability of seized coins (which could be liquidated later). News-driven volatility is likely as traders react to investigation updates and regulatory proposals. Medium-to-long term: the direct price impact on BTC should be limited because 22 BTC is small relative to circulating supply, but repeated institutional custody breaches erode confidence in how authorities handle crypto evidence and may increase regulatory intervention. That could raise compliance costs and shift demand toward professionally custodyed assets and decentralized self-custody solutions. Overall, expect short-term bearish pressure and elevated volatility for BTC, while long-term fundamentals remain driven by broader adoption and macro factors.