Federal agents have arrested a 25-year-old Alabama resident accused of infiltrating the Securities and Exchange Commission's (SEC) social media account to post a fake announcement about the approval of Bitcoin
Eric Council Jr. was arrested on October 17 and faces charges including conspiracy to commit aggravated identity theft and access device fraud, according to a US District Attorney's Office.
Operating under online pseudonyms like "Ronin," "Easymunny," and "AGiantSchnauzer," Council Jr. is alleged to have collaborated with others to compromise the SEC's X account in January 2024.
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The breach led to a deceptive post on January 9, falsely claiming that the SEC had greenlit the first Bitcoin ETFs in the United States. This misinformation triggered a surge in Bitcoin's value, with prices jumping over $1,000 shortly after the post.
SEC Chair Gary Gensler quickly denied the claim, clarifying that no such approval had been granted and that the account had been hacked. The misleading message was removed approximately 15 minutes after it appeared. The price then dropped by $2,000.
Investigations revealed that the hackers employed a "SIM swap" technique to gain control of the SEC's account. That is when scammers contact the victim's mobile phone carrier and trick them into activating a SIM card that the fraudsters have.
According to the indictment, Council Jr. obtained personal details and an identification template from his accomplices. Using his own card printer, he made a fake ID, which he then used at a mobile service provider's store to secure a SIM card linked to the victim's phone number.
After purchasing an iPhone with cash, he used the device and SIM card to retrieve access codes for the SEC's social media account. He passed these codes to his co-conspirators, who posted the fraudulent ETF approval message. In return for his participation, Council Jr. received a payment in Bitcoin. He later returned the iPhone for cash.
Further probing by the FBI uncovered that Council Jr. had conducted online searches related to the hack, including queries like "SECGOV hack," "Telegram sim swap," "how can I know for sure if I am being investigated by the FBI," and "What are the signs that you are under investigation by law enforcement or the FBI even if you have not been contacted by them."
US Attorney Matthew Graves pointed out:
These SIM swapping schemes <...> can result in devastating financial losses to victims and leaks of sensitive personal and private information. Here, the conspirators allegedly used their illegal access to a phone to manipulate financial markets. Through indictments like this, we will hold accountable those who commit these serious crimes.
Remarkably, just days after the hacking incident, the SEC actually approved the launch of 11 Bitcoin ETFs.
This case highlights the efforts of law enforcement to protect financial systems from cyber threats and hold perpetrators accountable for their actions.
In other news, Ripple has recently filed a cross-appeal in an SEC lawsuit.
