Australian Authorities Crack Seed Phrase to Seize $6.4 Million in Cryptocurrency

The Australian Federal Police (AFP) have accessed a suspect’s crypto assets valued at 9.3 million AUD ($6.41 million) by deciphering the wallet’s seed phrase.

The AFP-led Criminal Assets Confiscation Taskforce (CACT) has successfully restrained $9.3 million in cryptocurrency as part of an investigation into the alleged mastermind behind Ghost, the dedicated encrypted communication platform.https://t.co/GwYKhHqH9m

— AFP (@AusFedPolice) October 1, 2024

On September 17, law enforcement arrested a 32-year-old alleged administrator of the encrypted messenger Ghost as part of Operation Kraken. Authorities claim the app was specifically designed for organized crime involved in drug trafficking, money laundering, and contract killings.

Criminal elements purchased modified smartphones for $1600, which included a six-month subscription to the encrypted network and technical support. As of September 17, the AFP counted 376 such active devices in the country.

Ghost came under police scrutiny in 2022, although it was created about nine years ago. The messenger’s administrator faces six charges, including supporting a criminal organization, and could face up to 26 years in prison.

The suspect’s cryptocurrency was seized after a specialist from the Criminal Assets Confiscation Taskforce (CACT) in the AFP deciphered the seed phrase by analyzing digital devices found in his home. This allowed law enforcement to transfer the funds to their own secure storage.

The agency’s statement does not clarify the method used to crack the mnemonic, which devices of the administrator were accessed, or whether the phrase was 12 or 24 words long.

“The seizure of these assets demonstrates the technical capabilities and powers that the AFP and our partners through CACT can employ in the fight against organized crime. Whether you try to hide them in property, cryptocurrency, or cash, we will uncover your ill-gotten gains and take them, leaving you with nothing,” said Acting Agency Head Scott Raven.

This is the second instance of digital asset confiscation during Operation Kraken — in September, the AFP froze assets of suspects valued at 2 million AUD ($1.38 million).

Earlier in February, a former Australian police officer was accused of stealing bitcoins seized from a drug syndicate.