South Korea has launched a cross-agency investigation into cryptocurrency custody practices following repeated security lapses. The move comes after the National Tax Service inadvertently disclosed a seed phrase in a public press release, exposing seized digital wallets to potential compromise. Deputy Prime Minister Koo Yun-cheol directed the review to assess systemic vulnerabilities across government agencies responsible for handling crypto assets.
The incident has raised concerns about the safety of digital asset seizures and the protocols governing their storage. Authorities are now evaluating procedures to prevent future leaks and ensure proper handling of private keys. The probe involves multiple departments, aiming to strengthen oversight and accountability in the management of confiscated cryptocurrencies. This response underscores growing scrutiny over how public institutions manage sensitive digital assets in an increasingly blockchain-driven financial landscape.