The FBI has arrested Eric Council Jr., a 25-year-old resident of Alabama, in connection with the unauthorized hack of the U.S. Securities and Exchange Commission’s (SEC) X account (formerly Twitter) on January 9, 2024.
This incident has led to a significant spike in Bitcoin’s price, as a fake message falsely claimed SEC approval for the first U.S. Bitcoin exchange-traded funds (ETFs).
On the day prior to the SEC’s highly anticipated announcement regarding spot Bitcoin ETFs, Council and his accomplices exploited the compromised account to post misleading information that stated, “The SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges.”
This unauthorized post was quickly followed by a clarification from SEC Chair Gary Gensler, who stated that the claim was false and that the post was unauthorized.
The false announcement caused Bitcoin’s price to surge by approximately $1,000 before correcting sharply downward by about $2,000 once the misinformation was clarified.
The price fluctuations highlighted the sensitivity of cryptocurrency markets to regulatory news.
According to a federal complaint filed in Washington, D.C., Council allegedly executed a SIM swap attack to gain access to the SEC’s X account, involving fraudulently persuading a mobile carrier to transfer a phone number from its legitimate owner to a SIM card controlled by the attacker. By doing so, criminals can bypass multi-factor authentication measures.
Council reportedly created fraudulent identification documents to impersonate someone with access to the SEC account, enabling him to take control of the associated phone number and gain access to sensitive information.
Council faces multiple charges, including conspiracy to commit aggravated identity theft and access device fraud. If convicted, he could face up to five years in prison. The indictment alleges that Council’s actions were aimed at manipulating Bitcoin’s market value for personal gain.
During the investigation, federal agents discovered that Council conducted searches on his personal computer for terms like “SECGOV hack” and “how can I know for sure if I am being investigated by the FBI,” indicating awareness of the legal implications of his actions.
The hack has raises questions about market manipulation in the cryptocurrency space.