Ministry of SMEs and Startups refers 'Modoo's Startup' data breach to police, pledges trade secret registration support

The Ministry of SMEs and Startups said Monday it has referred the personal data breach involving its "Modoo's Startup" program to police for investigation. The ministry also announced it will provide free trade secret original certification registration to all program finalists to protect their startup ideas.

First Vice Minister Noh Yong-seok made the announcement at a briefing Monday afternoon at the Government Seoul Building, saying the ministry is conducting a detailed investigation in cooperation with the National Cyber Security Center.

Noh said there had been no unauthorized access to the database containing finalist information from last week's breach, adding that some data was exposed after finalist profile pages were opened.

According to the ministry, personal information such as resident registration numbers and contact details, as well as detailed application forms, were not exposed. However, idea summaries and evaluation comments were leaked in encrypted form.

The ministry said the breach occurred through abnormal API calls that allowed encrypted information to be extracted. Regarding the AI solutions company identified as the suspected source of the leak, Noh said the firm claims it used only publicly available information, and that the ministry intends to pursue legal liability if the investigation confirms wrongdoing.

"Please understand this as an unauthorized party using AI tools to abnormally extract encrypted information," Noh said. "The investigation results are still pending, but the relevant agencies view this as hacking."

On protecting finalists' ideas, Noh said the ministry will "actively utilize every available means under the current system," pledging to work with the Korean Intellectual Property Office to provide free trade secret original certification registration for the application forms submitted by all 5,000 finalists.

"The government will jointly verify that the application forms submitted to Modoo's Startup are the applicants' own startup ideas," he said. The ministry also said it will offer one-on-one consultations with more than 20 intellectual property and patent lawyers affiliated with its Startup One-Stop Support Center.

In addition, the ministry plans to hold idea protection matching days across all 17 cities and provinces in July, with specialist lawyers traveling directly to each region. Follow-up consultations through an online channel will also be available for applicants requiring additional idea protection measures.

The ministry plans to conduct a security audit through an external specialist firm and establish enhanced security measures. It will also create a dedicated information leak response team within the Korea Entrepreneurship Foundation to handle everything from incident investigation and victim intake to recurrence prevention.

The ministry said it has elevated the Modoo's Startup task force to be chaired by the vice minister. Following a kickoff meeting held Sunday, a second meeting took place Monday morning. The task force plans to convene regularly going forward to review the program's overall operational framework.

"I sincerely apologize for the inconvenience caused by this platform breach, and particularly for failing to maintain your trust in the government," Noh said. "We will make every effort to prioritize relief for applicants concerned about harm, prevent recurrence, and ensure a thorough investigation."

Meanwhile, the launch of the second cohort of Modoo's Startup, scheduled for early next month, is also expected to be postponed. Noh said "restoring trust through security comes first" and that the timing of the second cohort's launch will be adjusted.