In a striking breakthrough, the Australian Federal Police have successfully decoded a suspect’s password-protected cryptocurrency wallet backup worth approximately AUD 9 million (US $5.9 million), revealing how sophisticated criminals are hiding digital assets and how law enforcement is adapting.
AFP Commissioner Krissy Barrett described the operation as “miraculous work” in a speech, praising one of the agency’s data-scientists known informally as a “crypto safe-cracker”.
The case stemmed from an investigation into a “well-connected alleged criminal” who reportedly sold “a tech-type product to alleged criminals” and then stockpiled cryptocurrency.
During the probe, officers found encrypted notes on his mobile phone and an image containing seemingly random numbers. They determined the image was likely related to a crypto wallet seed phrase.
According to Barrett, the numbers were divided into six groups with over 50 possible combinations.
The AFP forensic team realised that the suspect had manually modified the sequence, adding extra digits to obscure the true seed. By stripping away the first digit from each group, the team uncovered the 24-word mnemonic phrase, which unlocked the wallet.
Once access was gained, the assets were transferred to a secure AFP-controlled account. The suspect had already declined to hand over wallet keys, an offence in Australia carrying a 10-year maximum sentence. “We knew if we couldn’t open the crypto wallet… he would leave prison a multi-millionaire,” Barrett said.
The asset seizure is part of the AFP-led Criminal Assets Confiscation Taskforce (CACT) under Operation Kraken, which targets organised crime networks hiding proceeds via encrypted technology.
Similar wallet-cracking successes have followed, including a second case where the same data scientist recovered roughly AU$3 million.
The operation highlights how law enforcement is increasingly equipped to trace and reclaim illicit digital assets, underscoring that, behind the code, criminals may still fall to human intuition. Whether the recovered funds will be forfeited to the Commonwealth depends on court rulings.