Cracking open crypto crime

Editorial: Sarah Larsen

Photography: Jesse Wray-McCann

When a seized hard drive landed in the hands of Detective Sergeant Dion Achtypis in 2013, cryptocurrency was an unknown entity to most.

His discovery led to Australia’s first cryptocurrency seizure and set the momentum for an increasingly vital Cybercrime Squad.

Detective Sergeant Achtypis describes himself as a self-taught tinkerer who first dabbled in Bitcoin’s software to stress-test computer hardware in his spare time.

As one of the few investigators with cryptocurrency experience, he was asked to examine the hard drive that belonged to an offender at the centre of a drug investigation.

“It started as a relatively routine investigation with the seizure of drugs and a range of technology. The investigators asked me to take a look at the hard drive to check for red flags,” Det Sgt Achtypis said.

“I discovered evidence of cryptocurrency use and darknet activity. This person was one of the most active sellers on the darknet in Australia.”

Det Sgt Achtypis took the hard drive to e-Crime Squad’s digital forensic analyst Troy Pretty to painstakingly uncover three accounts in a cryptocurrency wallet.

The first account held three Bitcoin, each worth approximately $120, causing a laugh among the colleagues.

“We joked that the boss will be really happy. Australia’s first Bitcoin seizure was worth a few hundred dollars,” Det Sgt Achtypis said.

While the second account raised the stakes with 15 Bitcoin, it was the third account that revealed 24,500 Bitcoin, worth $3.6 million at the time.

“All of a sudden, this became a very high priority but, like so many things in cybercrime, this was a first. There was no roadmap on how to achieve this seizure. We were writing the rule book as we went along.”

Victoria Police, government and lawmakers were required to not only act, but learn fast, thanks to briefings and technical demonstrations led by Det Sgt Achtypis.

The seizure, worth $1.3 billion today, was an Australian first and one of the largest in the world. It highlighted the emergence of cryptocurrency as a method to enable and obfuscate criminal wealth.

In response, Victoria Police supported Det Sgt Achtypis to build a specialised capability within the e-Crime Squad.

In July 2021, the evolving digital landscape demanded further investment, transforming e-Crime into a standalone Cybercrime Squad.

A cryptocurrency team was formalised and led by Det Sgt Achtypis, with the ability to tap into Cybercrime’s covert online operatives, digital forensic specialists and intelligence officers when needed.

One month later, the team seized another $8.5 million in cryptocurrency as part of an investigation with the Criminal Proceeds Squad.

“Although we’re dealing with cryptocurrency, the fundamentals of an investigation remain the same, but it’s the melding with specialised technical skills that gets us an investigative outcome,” Det Sgt Achtypis.

As for soft skills, Det Sgt Achtypis values conflicting attributes.

“To work in this field, you need to be extraordinarily stubborn and flexible at the same time,” he said.

“The minute you get something down pat, a line of code will change, or an update will occur and your system doesn’t work anymore.

“What I know now is completely different to what I did three years ago, and completely unrecognisable to what I did six years ago. That’s why I’ve been here for nine years.”

Sharing these values is Senior Constable Adam Gornowicz, a coding and programming specialist who traces untraceable funds.

Sen Const Gornowicz witnesses the daily impact of cryptocurrency’s emergence on the community.

He frequently responds to cases from people who have fallen victim to the likes of romance scams and fake exchanges.

“Happening far too often are fake exchanges, which are websites that look like legitimate cryptocurrency trading platforms,” Sen Const Gornowicz said.

The victim is encouraged to set up and deposit into an account, which is the offender’s account.

The platform displays an artificial dashboard, showing the victim’s money doubling in a matter of days.

Through customer service calls and a seemingly successful investment, the victim is encouraged to contribute more money.

They are unknowing until they try to withdraw the funds which, at that point, are gone.

“We’ve had countless versions,” Sen Const Gornowicz said.

“They think they’re going to be millionaires, but they’ve emptied their bank account.”.

It is reported that 17 per cent of Australians own cryptocurrency, but only one in 10 feel they understand it.

The cryptocurrency team and the wider Cybercrime Squad are in demand.

They are called upon to provide technical expertise to various investigations across Victoria Police, while also responding to the growing needs of the community.

Det Sgt Achtypis believes fulfilling both these priorities can be achieved through broader awareness and education of cybercrime, both within the organisation and across the community.

“A strategic focus of ours is making sure Victoria Police as an organisation is always getting better with its capabilities and knowledge in this area,” Det Sgt Achtypis said.

“That means more members in the field identifying it and fewer victims in our community.”

Broader knowledge is vital as the team tackles a rapidly evolving landscape.

While constant change may be frustrating to some, it keeps Det Sgt Achtypis and Sen Const Gornowicz returning to work every day.

“Adam and I aren’t there because it’s easy,” Det Sgt Achtypis said.

“We’re there because it’s hard.”

“There’s a tremendous sense of satisfaction knowing no-one else has done this before.

“The rule book is constantly being rewritten and we’re forever trailblazing.”

What is Cryptocurrency?

Cryptocurrency, or crypto, is a digital form of currency. It uses encryption to verify transactions, which makes it nearly impossible to counterfeit. The decentralised system does not rely on regulating authorities or banks and therefore makes money cheaper and faster to move.

Owners of cryptocurrency have digital wallets which contain keys, or passwords. Crypto holdings can only be accessed using private keys. If you lose your private key, you lose your money.

The first and most well-known cryptocurrency is Bitcoin which was launched in 2009 and is valued at $54,000.