Korean Soldiers with a Passion for Cryptocurrency Offered Topsecret Passwords as Collateral to Loan Sharks

Korean Soldiers Allegedly Used Top-secret Passwords as Collateral for Loans from Loan Sharks
Security
South Korea
According to reports from media outlets on September 23, several South Korean army officers may have used highly classified military passwords as collateral when borrowing money from loan sharks to invest in cryptocurrencies.
The Ministry of National Defence of South Korea stated that an unnamed captain was given a suspended prison sentence in June of this year and was officially discharged from the military on September 19.
The Defense Counterintelligence Command officers became aware of the captain’s crime earlier this year and charged him with violating the Military Secrets Protection Act. In March, the captain was sentenced to two years and six months in prison, with the sentence suspended for four years.
The nation’s intelligence agency is now investigating suspicions that other active-duty officers in a military unit in Chungcheong also used passwords to secure loans for crypto trading or investment. Local police and prosecutors have launched their own investigation but have not disclosed specific details about the case.
Media reports suggest that most of the soldiers involved in the incident were officers in their 20s and 30s who urgently needed money for cryptocurrency trading or investment. When these military officers were denied loans from commercial banks, they allegedly offered their passwords as collateral to loan sharks.
The soldiers then used the borrowed money to purchase tokens from cryptocurrency exchanges, although the specific amount and type of tokens involved have not been disclosed. Failure to repay the debt on time would put the soldiers at risk.
The investigative authorities are also planning to indict the group for violating the Military Secrets Protection Act. It is believed that the loan sharks were not connected to any suspected espionage groups.
The passwords shared by the soldiers are classified as level 3 secrets, which are changed daily and cannot be transmitted over phone lines or chat apps. If leaked, they must be immediately destroyed. Even expired passwords are considered highly sensitive military data as they can be used to access barracks and other military facilities.
While investigators are confident that the loan sharks did not attempt to access any base facilities using the passwords, politicians have criticized President Yoon Seok-yeol and the ruling People’s Power Party for the incident. The Democratic Party has called it a travesty.
The nation’s newest crypto investigation unit recently announced that it had seized $107 million worth of assets in its first year of operations.