Australian Police Arrest NSW Man in $6.4M Crypto Bust Under Operation Kraken

Highlights:

• Operation Kraken resulted in a $6.4 million crypto seizure and arrest of the alleged Ghost app mastermind in Australia.
• Australian Federal Police cracked seed phrases to access digital wallets linked to criminal activities.
• Operation Kraken has led to 46 arrests, 93 search warrants, and significant disruptions to organized crime networks.

Under Operation Kraken, the Australian Federal Police (AFP) seized $6.4 million in cryptocurrency and arrested a New South Wales man alleged to be the mastermind behind the encrypted communication app Ghost. On September 17, AFP officers arrested 32-year-old Jay Je Yoon Jung at his Narwee home. He faces multiple charges, including supporting a criminal organization and fraud.

According to the statement from the police, AFP analysts successfully cracked the seed phrase to Jung’s digital wallets found during the raid. This enabled them to transfer the cryptocurrency into secure storage under the Commonwealth Proceeds of Crime Act 2002. Acting Commander Scott Raven emphasized the AFP’s commitment to dismantling criminal networks. He said, “We will identify your ill-gotten goods and take them away from you, leaving you with nothing.”

The AFP has charged a NSW man, alleged to be a distributor of the encrypted criminal platform known as Ghost, as part of Operation Kraken-Bespin. https://t.co/tAxX0TksvY

— AFP (@AusFedPolice) October 1, 2024

Operation Kraken Makes Significant Impact

Operation Kraken’ has resulted in 46 arrests, 93 search warrants executed, and the seizure of over $11 million in assets, including $6.4 million in cryptocurrency from Jung. Authorities have also prevented more than 200 kilograms of illicit drugs from entering Australia and seized over $2 million in cash. The operation targets organized crime syndicates using encrypted communication platforms like Ghost to facilitate illegal activities.

Jung allegedly created Ghost at the age of 23, designing encrypted devices to prevent messages from being intercepted by law enforcement. He reportedly sold these dedicated encrypted communication devices for approximately $2,350 each, using a network that vetted users before granting access. Authorities believe over 600 active Ghost devices operate worldwide, with about 400 in Australia. Users consider these devices more secure than standard encrypted platforms like WhatsApp and Signal.

Additional Arrests and Seizures

In a related action under Operation Kraken, the AFP arrested a 47-year-old man in Greenacre, NSW, on September 17. He allegedly distributes the Ghost platform, arranging encrypted handsets for buyers via “dead drops” in exchange for payment. During the search of his home, police seized $17,400 in cash, eight mobile phones, three laptops, 23 SIM cards, and other encrypted devices.

Authorities charged the Greenacre man with failing to comply with an order to access electronic devices under section 3LA(5) of the Crimes Act 1914 (Cth). Moreover, he possessed a dedicated encrypted criminal communication device to facilitate serious criminal activity under section 192P of the Crimes Act 1900 (NSW). These offenses carry maximum penalties of ten years and three years imprisonment, respectively. He appeared in Downing Centre Local Court on September 18, and the court granted him bail, with a scheduled reappearance on October 2.

Broader Impact of Operation Kraken

Operation Kraken’ has also led to the seizure of assets linked to a syndicate in Western Australia. This included cryptocurrency and properties valued at approximately $1.3 million. The $6.4 million cryptocurrency seizure from Jung is the second largest under Operation Kraken. Under the Commonwealth Proceeds of Crime Act 2002, the AFP can restrain assets suspected to be proceeds of crime. The Criminal Assets Confiscation Taskforce will seek to have the restrained assets forfeited to the Commonwealth in due course.

The acting Commander Raven stated, “Operation Kraken showcases our technical capabilities and determination to disrupt organized crime. We are committed to identifying and restraining assets obtained through illicit means.” The AFP’s Criminal Assets Confiscation Taskforce collaborates with agencies like the Australian Taxation Office, AUSTRAC, and the Australian Border Force. Since 2012, the task force has restrained over $1.1 billion in criminal assets.

According to a recent report from AFP, Australians have lost $122 million to crypto scams in the past year. Most victims are now under 50 years old. The AFP highlighted that scammers use pig butchering and deepfakes to deceive people.