Arrest Made In SEC X Account Hack Prior To Bitcoin ETF Approval, FBI Says Phone Used To 'Manipulate Financial Markets'

Benzinga · 10/17 16:27

The FBI has arrested Eric Council Jr., a 25-year-old Alabama man, in connection with the January 2024 hack of the Security and Exchange Commission’s X account falsely stating Bitcoin ETFs were approved for trading that caused Bitcoin‘s (CRYPTO: BTC) value to spike by $1,000.

The ETFs were ultimately approved by the SEC the following day.

What Happened: According to a Thursday press release by the U.S. Attorney’s Office for the District of Columbia, Council is charged with conspiracy to commit aggravated identity theft and access device fraud. The indictment alleges that on Jan. 9, Council and his co-conspirators took unauthorized control of the @SECGov X account and posted a fake message purportedly from the SEC chair, falsely announcing the approval of Bitcoin ETFs.

U.S. Attorney Matthew Graves emphasized the severity of the accusations, stating, “Here, the conspirators allegedly used their illegal access to a phone to manipulate financial markets.” The hack’s impact was immediate and substantial, with Bitcoin’s price initially surging by over $1,000 before plummeting by more than $2,000 after the SEC regained control and issued a correction.

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The hackers allegedly employed a “SIM swap” technique to gain control of the SEC’s account. Principal Deputy Assistant Attorney General Nicole Argentieri stated, “Council, Jr. unlawfully accessed the SEC’s account on X by using the stolen identity of a person who had access to the account to take over their cellphone number.”

FBI Acting Special Agent in Charge David Geist highlighted the broader implications of such cybercrimes, noting, “In this case, the unauthorized actor utilized SIM swapping to manipulate the global financial market.”

The indictment details Council’s alleged role, including creating a fake ID, obtaining a SIM card linked to the victim’s phone line and sharing access codes with co-conspirators. Council is alleged to have received bitcoin as payment for his part in the scheme.

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