Australian Feds Seized $6.4 Million in Crypto

The Australian Federal Police (AFP) recently announced that they successfully deciphered a seed phrase, granting them access to a suspect's cryptocurrency holdings valued at $6.4 million (or 9.3 million Australian dollars).

This individual is alleged to be the creator of "Ghost," an encrypted messaging app purportedly utilised by organised crime syndicates.

Operation Kraken Led to Arrest of Jay Je Yoon Jung

Jay Je Yoon Jung, a 32-year-old resident of New South Wales, was apprehended on 17 September as part of "Operation Kraken."

Jung, seen on the left, is escorted in a perp walk following his arrest in Sydney

He faces five charges, including aiding a criminal organisation, which could result in a maximum prison sentence of 26 years.

According to the AFP, Jung allegedly developed the encrypted messaging app "Ghost" specifically for criminal enterprises, enabling users to coordinate activities such as drug trafficking, money laundering, and contract killings.

Resellers reportedly offered modified smartphones pre-installed with the app and technical support for around $1,600, providing users with six months of access.

The AFP noted that Jung regularly updated Ghost, and agents managed to covertly infiltrate the software to access the content of the modified devices.

Arrest Possible Due to Deciphering of Seed Phrase by Analysts

The seizure of cryptocurrency linked to Jung is the result of an analysis by a Criminal Assets Confiscation Taskforce (CACT) analyst who successfully deciphered the account's seed phrase from digital devices recovered during a raid on Jung's home.

With this breakthrough, the AFP was able to transfer $6.4 million in funds into secure storage.

The assets were restrained under the Commonwealth Proceeds of Crime Act 2002, aimed at disrupting criminal networks by confiscating their illicit wealth.

The agency said:

“This allowed the AFP to access the cryptocurrency to be transferred into secure AFP cryptocurrency storage.”

The AFP indicated that the cryptocurrency would be transferred to the government in due course, potentially to fund future law enforcement initiatives.

The CACT, led by the AFP, comprises specialists—including crypto experts—from agencies such as the Australian Taxation Office, the Australian Criminal Intelligence Commission, AUSTRAC, and the Australian Border Force.

This seizure marks the second major operation against Jung and users of the Ghost app as part of Operation Kraken, following the confiscation of $1.4 million in cryptocurrency and property in August.

AFP acting Commander Scott Raven warned:

“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.”

Operation Kraken, which is not affiliated with the popular crypto exchange, has already led to 46 arrests, the execution of 93 search warrants, and the confiscation of 30 illegal firearms.

Authorities have also intercepted more than 200 kilograms of illicit drugs from entering the Australian market and seized over $1.6 million in cash.

Since its establishment in 2012, the task force has restrained over $759 million in criminal assets.

As investigations proceed, the AFP plans to pursue the permanent forfeiture of the seized cryptocurrency, aiming to dismantle the financial networks of organised crime syndicates operating in Australia and more.