South Korea investigates seed phrase leak in photo leading to $4.8 million crypto theft from tax authority

South Korean tax authorities, the National Tax Service (NTS), lost $4.8 million worth of seized cryptocurrency after carelessly publishing a photograph of the seized assets that inadvertently exposed the hardware wallets' secret seed phrases. The NTS apologized, stating they shared the unblurred photo to provide more vivid information without realizing the sensitive data was visible. The stolen crypto belonged to a taxpayer who owed capital gains tax, and the authorities had seized at least four hardware wallets. Following the theft, the NTS requested police intervention and announced plans for an external review of its security system and an overhaul of the manual for handling virtual asset seizures. South Korea's Deputy Prime Minister and Minister of Finance and Economy confirmed the leak and stated that several government agencies would investigate to prevent future recurrences. This incident follows a separate 2021 case where Seoul police allegedly lost 22 BTC due to mishandling of funds and seed phrases.

(Source：CoinDesk)