The South Korean tax authorities accidentally disclosed the password of a seized crypto wallet. Shortly after publication of the password, approximately $4.8 million in tokens disappeared from the wallet.
Secret access code visible in official photo
The incident arose after the tax authorities published photos of hardware wallets that had been confiscated from tax evaders. In one of the images, the so-called seed phrase was clearly visible and not shielded.
A seed phrase is a string of 12 or 24 words that acts as a kind of master password. Anyone who knows these words can open the wallet and transfer all the crypto into it. Making it public is comparable to publishing your PIN code and account number at the same time.
4 million tokens moved via Ethereum
According to blockchain platform Etherscan, approximately 4 million PRTG (Pre Retogeum) tokens were transferred shortly after publication, worth approximately $4.8 million. The transactions took place on the Ethereum (ETH) network.
The data shows that a small amount of Ether was first sent to the wallet address to pay transaction fees. The tokens were then transferred to other addresses in three separate transactions. The fast timing indicates that someone used the published code.
Governments are struggling to store seized crypto
Security experts have been warning for years that photographing seed phrases entails major risks. In this case, it concerns a government agency responsible for managing seized crypto.
The tax authorities have not confirmed whether the tokens are permanently lost or whether recovery is still possible.
Source: https://newsbit.nl/zuid-koreaanse-belastingdienst-lekt-per-ongeluk-herstelzin-van-cryptowallet-miljoenen-dollars-aan-tokens-verdwenen/
