In a stunning turn of events, a 25-year-old Alabama resident, Eric Council Jr., has been arrested for hacking the Securities and Exchange Commission’s (SEC) X account in a fraudulent scheme that briefly caused Bitcoin’s price to spike by $1,000 in early January. Federal prosecutors announced the arrest on Thursday, linking Council to a series of cybercrimes, including identity theft and fraud, as part of a broader plan to manipulate cryptocurrency markets.
The January Hack that Shook the Crypto World
The hacking incident took place on January 9, 2024, a day before the highly anticipated SEC decision on the approval of spot Bitcoin exchange-traded funds (ETFs). Council and his co-conspirators allegedly used a SIM swap attack—a technique used to hijack a victim’s phone number and bypass multi-factor authentication—to gain access to the SEC’s verified X account, formerly known as Twitter.
Once inside the account, the hackers falsely posted that the SEC had approved the first-ever spot Bitcoin ETF, sending shockwaves through the cryptocurrency market. Investors, believing the fake news, rushed to buy Bitcoin, causing a rapid $1,000 increase in its price. Just 25 minutes later, SEC Chair Gary Gensler took to his personal X account to clarify that the post was “unauthorized” and that no such approval had been granted. In the wake of the correction, Bitcoin’s price fell sharply by $2,000, erasing the temporary gains.
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Bitcoin Payment for the Hack
According to the Department of Justice (DOJ), Council, who also operated under aliases such as “Ronin,” “AGiantSchnauzer,” and “@Easymunny,” received payment for the attack in Bitcoin. The federal indictment reveals that Council, alongside others who have yet to be named, executed the SIM swap attack by impersonating a legitimate user linked to the SEC’s X account. Using fake identification documents and the stolen phone number, the hackers accessed the account and posted the deceptive ETF announcement.
The Market Impact and Fallout
Although the phony post was swiftly deleted, the short-lived spike in Bitcoin’s value led to significant market activity. The indictment suggests that investors who bought into the fake news suffered immediate losses as Bitcoin corrected its price once the truth was revealed. In the 25-minute window, trading volumes surged, and the impact was felt globally.
Council’s Digital Trail and Arrest
Federal agents were able to track down Council after noticing that he had conducted searches on his personal computerfor terms like “SECGOV hack,” “federal identity theft statute,” and “how can I know for sure if I am being investigated by the FBI.” These digital breadcrumbs led law enforcement directly to him, culminating in his arrest in Alabama early Thursday morning.
Charges and Potential Penalties
Council is now facing federal charges, including conspiracy to commit aggravated identity theft and access device fraud, both of which carry severe penalties. If convicted, Council could face a maximum sentence of five years in prison.
SEC and FBI Statements
In a joint statement, the SEC and FBI emphasized the seriousness of the attack, particularly its implications for global financial markets. Acting FBI Special Agent in Charge Geist said, “This case exemplifies the dangers of SIM swappingand the increasing risks posed by cybercriminals to financial systems. The FBI will continue to pursue those who attempt to manipulate markets through fraudulent means.”
SEC Chair Gary Gensler also reiterated the agency’s commitment to safeguarding market integrity, noting that such attacks undermine public trust in financial institutions.
Ongoing Investigation and Broader Implications
While Council has been arrested, federal investigators believe that others may have been involved in the January hack. The DOJ has yet to release the names of additional suspects but indicated that more arrests could follow.
This high-profile incident also underscores the growing intersection of cybersecurity and financial regulation, particularly in the volatile world of cryptocurrency markets. The use of SIM swapping as a tool for market manipulation highlights vulnerabilities that regulators and exchanges will need to address to protect investors in the future.
Conclusion
The arrest of Eric Council Jr. brings an end to one chapter in a highly unusual case of cybercrime and market manipulation, but it serves as a stark reminder of the evolving threats in today’s digital finance landscape. With cryptocurrency becoming more intertwined with mainstream markets, safeguarding sensitive information and securing digital platforms has never been more critical.
Council’s actions may have temporarily disrupted the markets, but the broader implications of this incident will likely influence how regulators and market participants approach security for years to come.
