South Korea National Tax Service's Cryptocurrency Mishap Exposes Operational Security Flaws

The National Tax Service (NTS) of South Korea has made a costly mistake that resulted in the loss of millions of dollars' worth of cryptocurrency. The agency's failure to keep sensitive information secure led to the theft of 4 million Pre-Retogeum (PRTG) tokens, which were later returned to their original wallets.

The incident occurred when the NTS published unredacted photos of crypto wallet seed phrases in an official press release. The high-resolution images showed handwritten recovery phrases for seized Ledger hardware wallets, making it easy for an unknown actor to access the funds.

On-chain data shows that the wallets were drained soon after the photos went public, with the attacker sending a small amount of Ethereum (ETH) to cover gas fees and then transferring the PRTG tokens to a new address. The incident highlights the importance of proper technical safeguards when handling self-custodied digital assets.