Cryptocurrency worth $9.3 million allegedly belonging to app developer Ghost seized by AFP

Australian Federal Police will claim in court that they have seized cryptocurrency worth $9.3 million belonging to Jay Je Yoon Jung – the alleged creator of the Ghost app – which they believe was created solely for the use of criminal organizations.

AFP says it has also arrested another man they believe was distributing the app for Mr Jung.

The statement comes two weeks after AFP arrested 32-year-old Jung at his home in Narwee and spent several days searching the property, which included the seizure of numerous digital devices.

The AFP will allege that an analyst from the AFP Criminal Asset Forfeiture Task Force decrypted the “seed phrase” of Mr. Jung’s cryptocurrency account.

Police road block and house — Jay Je Yoon Jung was arrested at his home in Narwee, where he lived with his parents. (ABC News: Jerry Rickard)

A seed phrase is a user-created recovery tool that uses words to ultimately grant access to funds.

AFP says it transferred the funds to a secure account.

Tom Uren is a cybersecurity expert and author of the cybersecurity policy newsletter Serious Risky Business. At 7:30 he said better-equipped authorities routinely infiltrate the software as part of their investigations.

“Twenty or thirty years ago, police didn’t break into networks or do anything like that, but now it’s very much the bread and butter of modern policing,” Uren said.

AFP says Jung created the “Ghost” app at the age of 23 and designed it to be used exclusively by the underworld to organize high-level criminal activities.

Jung has since been charged with five charges, including supporting a criminal organization.

Spy techniques on display

Federal police officer in front of the house. — An AFP officer outside Mandat Lieu’s house. (ABC News: Jerry Rickard)

A “close associate” of the alleged creator of the “Ghost” app, Jay Je Yoon Jung, is accused of being the alleged distributor of the platform and selling to clients from the criminal underworld.

AFP alleged that Mandat Lieu, 47, arranged for the encrypted phones to be delivered to buyers – who include major criminal syndicates – via dead drops for payment.

These “dead moments” allegedly involved Mr. Lieu arranging a meeting place where customers could pick up their devices without being seen together.

Entrance door to a house with a broken lock. — Broken locks on the front door of Mandat Lieu’s home in Greenacre, which was searched by AFP officers. (ABC News: Jerry Rickard)

“It’s interesting because it’s actually a technique that spies can use to separate buyers from sellers, making it harder for people to keep track of who’s buying what and where,” Uren said at 7:30.

AFP says Jung created a business model of selling phones with his app installed for $2,345, which included a six-month subscription.

AFP officers tactically entered Mr Lieu’s home in Greenacre and searched it in the early morning hours of September 18.

Police seized $17,400 in cash, eight cell phones, three laptops, 23 SIM cards and 15 other communication devices, and encrypted USB drives.

Phone with the Ghost application — The Ghost app was cracked by AFP and used to make a series of arrests. (Delivered)

AFP accuses Lieu of denying investigators access to two mobile phones found in his bedroom, believed to be intended for encrypted GhostECC communications.

“It’s actually a lucrative business in itself because criminals are willing to pay big money for what they believe is secure communication,” Uren said.

The 47-year-old was charged with failing to comply with an order and possessing a special, encrypted criminal communication device enabling serious criminal activity.

He will appear in the Sydney Downing Center Local Court today.

Operation Kraken

Phone connected to wires. — The AFP has several techniques at its disposal to crack encrypted data. (ABC News: Jerry Rickard)

Since March, AFP has been able to track messages sent using Ghost, with officers tracking 125,000 messages sent between criminals.

The armed forces’ “dissolution phase” began on September 17 and included dozens of raids across the country targeting alleged users of the platform.

To date, 46 arrests have been made, 30 firearms seized and $2.37 million in cash located.

The man is handcuffed and walking down the street. — Jay Je Yoon Jung arrested after AFP raid on his house on September 17. (Delivered)

Uren says that in investigations like this one, officers usually arrest “important people” first, and it can take months or even years to charge “lower-level people.”

He says these types of operations gave AFP the opportunity to discover “who some of the most important figures were that they weren’t even aware of.”

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