Australian Police Crack Crypto Wallet Seize $5.9M in Digital Assets

TLDR

• AFP recovered $5.9M in crypto by decoding a wallet found on a suspect’s phone.
• The wallet was cracked by removing altered digits from each number sequence.
• The suspect faced up to 10 years for refusing to give wallet access to police.
• The seized crypto may be used to fund crime prevention after court approval.

Australian police have unlocked a cryptocurrency wallet that held AU$9 million (about US$5.9 million), after a digital forensic investigation linked to an alleged criminal. The encrypted data was stored in a coded format, and a data scientist within the Australian Federal Police (AFP) managed to retrieve the 24-word seed phrase, allowing authorities to access and seize the funds.

Encrypted Wallet Discovered During Criminal Probe

The wallet was found during an investigation into a man suspected of selling tech-related products to other alleged criminals in Australia. During the operation, police searched the individual’s mobile phone and discovered password-protected notes along with an image that appeared to contain random numbers and words.

AFP Commissioner Krissy Barrett said the coded image was divided into six groups and included more than 50 number combinations. The AFP’s digital forensics team believed the image could be connected to a crypto wallet backup. Since the suspect refused to hand over access to the wallet, the team worked to decode it.

According to Barrett, withholding wallet access carries a prison sentence of up to 10 years in Australia. She stated, “We knew if we couldn’t open the crypto wallet… he would leave prison a multi-millionaire.”

Data Scientist Cracks Hidden Seed Phrase

The wallet was eventually opened by one of the AFP’s data scientists who had worked on past crypto-related investigations. He noticed that several of the number strings in the image did not appear machine-generated. Instead, they seemed altered by hand.

The scientist explained that the suspect had added an extra digit to the beginning of each sequence, possibly to mislead any unauthorized access attempts. After removing the first number from each group, he was able to extract the correct 24-word seed phrase used to unlock the wallet.

Barrett referred to the method used as a “crypto booby prize,” designed to create confusion in case the backup was discovered. This approach, however, was overcome by the AFP team’s analysis and experience in previous digital asset recoveries.

Previous Crypto Recovery by AFP Team

This is not the first time the same AFP data scientist has recovered digital currency linked to criminal activity. In a separate case, he helped retrieve more than AU$4.7 million (about US$3 million) by using a different decoding method.

Both recoveries were carried out by the AFP-led Criminal Assets Confiscation Taskforce. This taskforce is responsible for identifying, seizing, and managing assets suspected to be linked to crime.

The AFP confirmed that once the funds are legally confiscated by a court order, they will be transferred to a commonwealth account managed by the Department of Home Affairs. According to standard procedures, these funds can then be used for crime prevention programs in Australia.

Legal Process and Asset Confiscation

Authorities are now waiting for the court to decide on the full confiscation of the recovered funds. If approved, the money will not be returned to the suspect.

The AFP’s Criminal Assets Confiscation Taskforce works closely with courts and other agencies to ensure that digital and physical assets tied to criminal activities are legally recovered. This wallet seizure is now part of ongoing efforts by Australian law enforcement to stop the use of digital currency for illegal activities.

According to the AFP, criminals are increasingly using technology to store proceeds from unlawful trades. Digital forensic investigations continue to be a key part of their strategy to stop these operations and recover illegal gains.

The post Australian Police Crack Crypto Wallet Seize $5.9M in Digital Assets appeared first on CoinCentral.