South Korea's National Tax Service Accidentally Exposes Crypto Wallet Recovery Phrase, Leading to $4.4M Theft

South Korea’s National Tax Service accidentally exposed the mnemonic recovery phrase of a seized cryptocurrency wallet during a press release, leading to the theft of $4.4 million in crypto assets. The funds were stored in a Ledger cold wallet confiscated from 124 high-value tax evaders, with the total seized assets valued at 8.1 billion won (~$5.6 million). Photos of the Ledger device included an unredacted handwritten note containing the recovery phrase, which functions as a master key for wallet access. Shortly after the press release, 4 million Pre-Retogeum (PRTG) tokens, worth approximately $4.8 million at the time, were transferred from the confiscated wallet to a new address. The incident occurred during the announcement of the operation’s success, though no specific date was provided.