The Australian Federal Police will allege in court that it has restrained $9.3 million in cryptocurrency from Jay Je Yoon Jung – the alleged creator of the app Ghost – which they allege was created solely for the use of criminal organisations.
The AFP says it has also arrested another man they allege distributed the app for Mr Jung.
The announcement comes two weeks after the AFP arrested the 32-year-old Mr Jung at his Narwee home and spent days searching the property, which included the seizure of multiple digital devices.
The AFP will allege that an analytics specialist from the AFP’s Criminal Assets Confiscation Taskforce deciphered Mr Jung’s cryptocurrency account’s “seed phrase”.
A seed phrase is a recovery tool created by a user that uses words to grant access to funds as a last resort.
The AFP says it has transferred the funds into a secure account.
Tom Uren is a cyber security expert and author of the cyber security policy newsletter Seriously Risky Business. He told 7.30 that better equipped authorities are now routinely infiltrating software as part of their investigations.
“Twenty or thirty years ago, police did not hack, that was not a thing that they did, but that’s very much part of the bread and butter of a modern police force nowadays,” Mr Uren said.
The AFP alleges Mr Jung created the ‘Ghost’ app when he was 23 years old and designed it to be exclusively used by the underworld to organise high-level criminal activity.
Mr Jung has since been charged with five offences, including supporting a criminal organisation.
Spy techniques on display
A “close associate” of alleged ‘Ghost’ app mastermind Jay Je Yoon Jung is accused of being an alleged distributor of the platform, selling to customers in the criminal underworld.
The AFP will allege 47-year-old Mandat Lieu arranged for encrypted handsets to be delivered to buyers – which includes major criminal syndicates – through “dead drops” for payment.
These “dead drops” allegedly involved Mr Lieu organising a rendezvous point for customers to pick up the devices without being seen together.
“This is interesting because this is really a technique that spies might use to try and separate buyers and sellers, so it’s harder for people to track who’s buying what and where,” Mr Uren told 7.30.
The AFP alleges that Mr Jung created a business model that involved selling handsets installed with his app for $2,345, which included a six-month subscription.
Mr Lieu’s Greenacre house was tactically entered by AFP officers and searched in the early hours of September 18.
Police seized $17,400 in cash, eight mobile phones, three laptops, 23 SIM cards and 15 other communication devices and encrypted USBs.
The AFP alleges Mr Lieu refused to provide investigators with access to two mobile phones found in his bedroom, believed to be GhostECC dedicated encrypted communications devices.
“It’s actually a lucrative business on its own, because the criminals are willing to pay a lot of money for what they think are secure communications,” Mr Uren said.
The 47-year-old was charged with failing to comply with an order and possessing a dedicated encrypted criminal communication device to facilitate serious criminal activity.
He will face Sydney Downing Centre Local Court today.
Operation Kraken
The AFP has been able to track messages sent on Ghost since March, with officers tracking 125,000 messages sent between criminals.
The force’s ‘resolution phase’ launched on September 17 which involved dozens of raids being executed across the country, targeting alleged users of the platform.
There have been 46 arrests so far, 30 firearms seized and $2.37 million in cash located.
Mr Uren says in investigations like this one officers tend to arrest the “important people” first and that it could take months or even years before they prosecute the “lower ranking people”.
He says these types of operations have given the AFP the ability to uncover “who some of the higher up kingpins are, who they weren’t even aware of”.
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