South Korean police are investigating after 22 bitcoin worth about $1.5 million disappeared from a police station in Seoul. The missing bitcoin had been kept as evidence in a criminal case. The incident is now raising serious concerns about how authorities store and protect digital assets.

The bitcoin were being held at the Gangnam Police Station. They had been surrendered during a criminal investigation in November 2021. However, the case was later suspended, and the bitcoin remained in storage for several years.

The problem was discovered during a nationwide audit. Police across the country began checking their digital asset holdings after another office, the Gwangju District Prosecutors’ Office, reported losing 320 bitcoin in a separate case. That earlier loss triggered a full review of digital asset storage practices.

When inspectors checked the Gangnam Police wallet, they found something unusual. The physical USB cold wallet device was still there and showed no signs of damage. But the 22 bitcoin stored inside it were gone. Authorities confirmed that the funds had been transferred to an outside wallet without permission.

Police believe that the private keys may have been accessed improperly. Without those keys, bitcoin cannot be transferred. This suggests that someone gained access to the wallet credentials.

“We are conducting a thorough internal investigation into the transfer process and custody management,” a police official said. “All relevant digital records are being examined.”

Cold wallets are usually considered very secure because they store bitcoin offline. This protects them from many types of hacking. However, experts say that cold wallets are only safe if strict physical and personal security procedures are followed.

If officials only seized the USB device but did not transfer the bitcoin to a new government-controlled wallet, the original owner might still have had backup access. Poor password handling or weak internal controls can lead to unauthorized transfers.

Investigators from the Gyeonggi Northern Provincial Police Agency are now reviewing access logs, transaction histories, and custody procedures. So far, no police officers have been publicly accused of wrongdoing.

Authorities are also using blockchain analysis tools to trace where the bitcoin were sent. While Bitcoin transactions are publicly recorded, recovering stolen digital assets is often very difficult, especially if the funds were moved to private wallets.

This case follows a larger bitcoin loss at the Gwangju District Prosecutors’ Office, where 320 BTC disappeared. In that case, officials blamed a leaked password connected to a phishing attack. Both incidents reportedly involved USB-style storage devices. It is not yet known how a password leak could lead to loss of funds from a hardware wallet held in police custody.

Security specialists say these back-to-back losses show possible weaknesses in how government agencies manage digital assets. Professional bitcoin custody firms usually use multi-signature wallets, meaning more than one person must approve any transaction. They also use special security systems to protect private keys.