$9.3 million worth of cryptocurrency allegedly belonging to the mastermind of the Ghost app was seized by AFP

The Australian Federal Police will claim in court that they seized $9.3 million worth of cryptocurrency from Jay Je Yoon Jung, the alleged creator of the Ghost app, which he claimed was created solely for the use of criminal organisations.

The AFP said it had also arrested another person it claimed distributed the app on Mr Jung’s behalf.

The announcement came two weeks after AFP arrested Mr Jung, 32, at his home in Narwee and conducted a days-long search of the property, which included the seizure of several digital devices.

The AFP will claim that an analyst from the AFP’s Criminal Asset Confiscation Task Force cracked the “seed statement” of Mr Jung’s cryptocurrency account.

Jay Je Yoon Jung was arrested at this house in Narwee, where he lived with his family. (ABC News: Jerry Rickard)

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

AFP announced that the funds were transferred to a secure account.

Tom Uren is a cybersecurity expert and author of the cybersecurity policy newsletter Serious Risk Business. At 7.30, he said better-equipped authorities now routinely hack into the software as part of their investigations.

“Twenty or thirty years ago the police weren’t hacking, it wasn’t something they did, but it’s part of the bread and butter of the modern police force today,” Mr. Uren said.

The AFP alleges that Mr Jung created the ‘Ghost’ app when he was 23 and designed it solely to be used by the underworld to organize high-level criminal activity.

Mr Jung has since been charged with five crimes, including supporting a criminal organisation.

Espionage techniques are on display

An AFP officer in front of Mandat Lieu’s house. (ABC News: Jerry Rickard)

A “close associate” of the alleged mastermind of the ‘Ghost’ app, Jay Je Yoon Jung, is accused of being the platform’s so-called distributor, selling to customers in the criminal underworld.

AFP will allege Mandat Lieu, 47, arranged for encrypted phones to be delivered via “dead delivery” for payment to recipients, including major criminal organisations.

These “dead drops” allegedly involved Mr. Lieu organizing a meeting point for customers to pick up devices without being seen together.

The broken locks on the front door of the Greenacre home of Mandat Lieu, who was wanted by AFP officers. (ABC News: Jerry Rickard)

“It’s interesting because it’s really a technique that spies can use to try to separate buyers and sellers, so it’s harder for people to keep track of who’s buying what and where,” Mr. Uren said at 7.30am.

AFP alleges that Mr Jung created a business model that involved selling phones loaded with his app for $2,345, including a six-month subscription.

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

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

The Ghost app was cracked by the AFP and they used it to make a number of arrests. (Provided)

AFP alleges that Mr Lieu refused to give investigators access to two mobile phones found in his bedroom, believed to be GhostECC-specific encrypted communication devices.

“This is actually a lucrative business in itself, because criminals are willing to pay a lot of money for what they think are secure communications,” Mr. Uren said.

The 47-year-old man was charged with failing to comply with an order and possessing a special encrypted criminal communications device to facilitate serious criminal activity.

He will face Sydney Downing Center Local Court today.

Operation Kraken

AFP has a variety of techniques they can use to break encrypted data. (ABC News: Jerry Rickard)

AFP has been able to track messages sent via Ghost since March; officers are tracking 125,000 messages sent between criminals.

The force’s ‘resolution phase’, launched on September 17, involved carrying out dozens of raids across the country targeting alleged users of the platform.

So far, 46 people have been arrested, 30 firearms have been seized, and $2.37 million in cash has been seized.

Jay Je Yoon Jung was detained after AFP raided her home on September 17. (Provided)

In investigations like this, Mr. Uren says, officers tend to arrest “important people” first and can take months or even years to prosecute “low-ranking people.”

He says such operations give the AFP the ability to uncover “who some of the high-level ringleaders are, who they may not even be aware of.”

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