They believed the money was the proceeds of the alleged VenusFX fraud, and detectives from the Asset Recovery Unit identified deposits of more than $2.2m into two Bank of New Zealand accounts over a seven-month period in 2016.
The New Zealand police made an application to the High Court to freeze the balance of the funds, nearly $1.9m in bank accounts controlled by Shahidan, under the Criminal Proceeds Recovery Act.
The law is designed to seize profits from alleged criminal offending.
In a court hearing in February, the police alleged Shahidan - who represented himself - unlawfully benefited from "significant criminal activity" by laundering the proceeds of the fraudulent VenusFX foreign exchange trading scheme into the two bank accounts.
He opposed the restraining order, denied being involved in significant criminal activity and argued the funds were not "tainted" in terms of the criminal proceeds law.
Shahidan claimed to have a minor role in VenusFX as a programmer doing technical work on the "back end of the system", and having nothing to do with financial matters.
This was at odds with a statement he gave to the Royal Malaysian Police in which Shahidan admitted being a founder of VenusFX along with several friends.
Several YouTube videos of VenusFX events were played to the court, in which Shahidan was shown giving speeches to promote the scheme.
"The relevant videos strongly support the inference that Mr Shahidan was a much more central figure in VenusFX than he was willing to admit," wrote Justice Sarah Katz in her judgment released in June.
Shahidan was also the sole director and shareholder of Venus Financial Markets Limited, which the police allege was the corporate entity underpinning VenusFX, which he set up in New Zealand in 2015.
Two days before establishing that business, Shahidan registered a second company in New Zealand called Igateway Limited. He was the sole shareholder and director.
The police allege that Igateway traded as "IZZIPAY", a payment processing website listed as a "partner" of VenusFX on its website.
Shahidan disputed this, although Justice Katz said the police claim was supported by contemporaneous documents.
More than $2.2m was deposited into the Igateway bank accounts between February and September 2016.
The timing of the deposits to Igateway coincides with the period in which VenusFX is believed to have operated, said Justice Katz.
When the Bank of New Zealand put a "stop" on the Igateway accounts in May 2016, Shahidan told the bank the deposits were payments to his software business - not VenusFX.
Under cross-examination in the High Court, Shahidan was asked to explain why, in a July 2016 Facebook post in the name of VenusFX, investors were told to put funds into an Igateway account.
Shahidan said the Facebook page was not VenusFX's page and the instruction for investors to deposit funds into a bank account, of which he was the sole signatory, was posted by another person, for unknown reasons.
These explanations were "entirely implausible", said Justice Katz.
"Further, it seems inherently improbable that Mr Shahidan, apparently working on his own, would have been able to generate revenue of over $2m for software programming services over a seven-month period when he was also working full-time as the chief operating officer for VenusFX," the High Court judge wrote.
Justice Katz ruled there were "reasonable grounds" to believe money laundering had occurred and Shahidan had benefited from the alleged crime, and granted the interim restraining orders.
Frozen assets are held by the Official Assignee, a government body that administers bankruptcies until the High Court rules on whether they should be permanently forfeited to the Crown. The process takes two years, on average, but the most complex cases can take longer.
The case against Shahidan is the latest in which police have worked with overseas law enforcement agencies to restrain assets in New Zealand that were allegedly derived from criminal activity in other countries.
The most notable of these was the $70m forfeited this year by Canadian businessman Edward Gong, which is easily the largest forfeiture since the Criminal Proceeds Recovery Act came into effect in 2009.
Since the police gained those new powers, more than $1 billion in alleged criminal wealth has been frozen in New Zealand.
The success of the police in enforcing the law was "impressive", according to a new report published in April by the Financial Action Task Force (FATF), an intergovernmental body based in Paris.
The FATF report said that New Zealand was one of only four countries to achieve a "high level of effectiveness" in pursuing criminal proceeds, along with the United States, Israel and Honduras.