Two suspects have been detained in South Korea over the theft of 22 bitcoin that had gone missing from police custody earlier this year. Authorities say an investigation is ongoing, but the arrests represent the first major breakthrough in the high-profile case.

According to local media reports, the suspects, "Mr. B" and "Mr. C," were arrested by officers from the Gyeonggi Northern Provincial Police Agency on February 25th. The police declined to comment further, as the investigation is still ongoing. It is also unclear whether the stolen 22 BTC (USD 1.5) have been recovered.

However, it is believed that the arrested individuals may be associated with the A Coin Foundation, which was the initial target of a police investigation after the organization filed a complaint about the theft of its crypto assets, valued at around KRW 4.8 billion (USD 3.4 million) at the time in 2021.

During the investigation, law enforcement officers discovered a wallet storing 22 BTC believed to be tied to the case and seized the funds.

As reported by Cybernews in January this year, the police reportedly acknowledged that they had suffered a phishing attack after a member of their team was tricked into visiting a scam website during a routine check of seized BTC.

This reportedly enabled criminals to access sensitive data, which was then allegedly used to steal BTC from a hardware wallet. The funds had been seized from an illegal gambling operator who was later sentenced to two and a half years in prison.

However, undisclosed sources have now told local media that instead of securing the seized bitcoin in their own hardware wallet, the police allegedly stored the funds using a hardware wallet provided by the A Coin Foundation. If this is true, anyone who knew the wallet's seed phrase – a combination of 12–24 words that gives access to a crypto wallet – could have accessed the bitcoin and transferred it to their own wallet.

Moreover, an officer investigating the A Coin case has been sentenced to prison for accepting bribes from officials of the foundation.

This case has also sparked debate over how police storage of crypto assets can be improved, including changes to the legal framework and the implementation of best practices for safeguarding these assets. For example, setting up a multisignature wallet that requires multiple private keys to authorize a transaction.

Crypto security experts have already raised concerns that police may be slow to catch up with crypto criminals. However, recent crypto-related investigations have shown that law enforcement has become more capable of solving complex crypto cases.

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