South Korean authorities managed to recover more than $5 million in stolen cryptocurrency, but unfortunately, a significant portion of it was stolen again when they accidentally published the recovery code online.
A cryptocurrency recovery code is a long, randomly generated password used to help you get back into your crypto wallet if you forget your login information or lose access.
Members of South Korea’s tax agency mistakenly revealed a sensitive code while announcing the recovery of a large amount of stolen cryptocurrency in late February.
Officials recover $5M in crypto but forget to blur the password
This agency handles taxes within the country, including checking tax returns and making sure people follow the law. Recently, in February 2026, they identified and penalized 124 individuals and businesses with a history of not paying their taxes, according to reports from South Korean news sources.
Investigators found that a suspect stole four USB drives containing cryptocurrency, along with five high-end watches, 19 designer handbags—including Hermès—jewelry, and other valuable possessions.
The stolen physical goods were valued at approximately $300,000 (400 million won), and the cryptocurrency in the stolen wallets was worth about $5.6 million.
The National Tax Service announced details about a costly error that resulted in a loss of one billion won.
The agency mistakenly published a photo in its press release that showed the wallet’s recovery code. Thieves quickly noticed this and used it to steal about $4.8 million (roughly 6.4 billion won).
The recent theft has drawn strong public criticism. Professor Cho Jae-woo of Hansung University explained that it’s as if the authorities invited criminals to steal, adding that a lack of understanding of virtual assets means the government could lose out on recovering potentially tens of billions of won.
South Korean police issued a public apology the following weekend.
We mistakenly shared the original photo with the media, hoping to give the public a clearer picture of the situation. Unfortunately, the photo contained private details about our digital assets, and we take full responsibility for this oversight. There’s no justification for this error.
This recent problem in the crypto world follows an incident in early February where a company mistakenly distributed $40 billion worth of Bitcoin to its customers.
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2026-03-04 23:20