South Korean prosecutors have liquidated 320.8 Bitcoin previously recovered after a phishing incident that led to the temporary removal of crypto assets from government custody. According to The Chosun Ilbo, the Gwangju District Prosecutors’ Office reported that they sold the Bitcoin at market prices, accumulating 31.59 billion Korean won (~$21.5 million) that has now been added to the national treasury.

The authorities strategically sold the Bitcoin in small increments over 11 days from February 24 to March 6 to minimize disruption in the market. This Bitcoin was originally seized from a suspect involved in an illegal gambling site, which reportedly processed about 390 billion won (approximately $285 million) in wagers from 2018 to 2021.

Return of Bitcoin Lost in Phishing Attack

The recovered Bitcoin was determined to be lost during a transfer in August 2025 when asset managers were deceived by a phishing website. After tracking the funds back to a hacker’s wallet, authorities managed to reclaim the cryptocurrency, which was returned to a government-controlled wallet on February 17.

Related: South Korean authorities under fire over $43B Bithumb Bitcoin error

On February 19, the hacker unexpectedly returned 320.88 Bitcoin, all of which were subsequently assigned to a secure exchange wallet managed by the authorities.

Re-evaluating Crypto Losses in Debt Restructuring

In another development, South Korean courts are reevaluating how they handle cryptocurrency-related debts in personal rehabilitation scenarios. Newly established rehabilitation courts in Daejeon, Daegu, and Gwangju are drafting guidelines that may exclude losses from stock and cryptocurrency investments from liquidation value calculations. This approach would equate crypto losses with regular asset losses, potentially easing repayment burdens for individuals undergoing court-supervised debt restructuring.

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