Australian Federal Police Cracks Seed Phrase to Seize Millions in Cryptocurrency

The Australian Federal Police (AFP) has successfully accessed $6.4 million in cryptocurrency tied to a suspect accused of running an encrypted messaging app called “Ghost.” Authorities claim that organized crime groups used this app for illegal activities, including drug trafficking and contract killings.

On October 2, the AFP revealed that its Criminal Assets Confiscation Taskforce (CACT) managed to “decipher” a seed phrase from digital devices seized at the home of Jay Je Yoon Jung, the alleged creator of Ghost. This allowed the authorities to transfer the funds into a secure AFP cryptocurrency wallet. According to the AFP, the confiscated funds will eventually be forfeited to the government and could be used to support law enforcement programs.

This is not the first seizure in Operation Kraken, the AFP’s ongoing crackdown on those involved with Ghost. In August, authorities also seized $1.4 million in cryptocurrency and properties connected to the operation. Acting Commander Scott Raven said, “Whether you have tried to hide them in real estate, cryptocurrency or cash, we will identify your ill-gotten goods and take them away from you, leaving you with nothing.”

Jung was arrested on September 17 and now faces five charges, including supporting a criminal organization. If found guilty, he could face up to 26 years in prison. The AFP claims that Ghost was designed explicitly for criminals, allowing them to engage in activities like money laundering and drug trafficking. Authorities believe they prevented 50 potential threats to kill or harm others through this operation.

As part of the investigation, the AFP discovered that resellers offered modified smartphones with six months of access to the Ghost app, priced at around $1,600. The AFP said it infiltrated the app, infecting the modified phones and gaining access to the content. Jung also allegedly pushed regular updates to the app to keep it functioning smoothly for users.

Operation Kraken is led by the AFP and includes experts from several agencies, such as the Australian Taxation Office, AUSTRAC, Australian Criminal Intelligence Commission, and Australian Border Force. This multi-agency collaboration brought together specialists, including crypto experts, to target criminal activity associated with Ghost.