A prison sentence was issued by the Department of Justice following the breach of the SEC’s social media account, through which a false announcement regarding bitcoin ETF approval was made, temporarily causing a surge in the cryptocurrency markets.
Hacker Sentenced by DOJ for SEC X Account Breach and Fake Bitcoin ETF Post
It was announced by the U.S. Department of Justice (DOJ) on May 16 that a resident of Huntsville, Alabama, had been sentenced to more than one year in prison for participating in a cyberattack targeting the social media platform of the Securities and Exchange Commission (SEC). A 14-month prison term followed by three years of supervised release was handed down to 26-year-old Eric Council Jr., after a guilty plea was entered on conspiracy charges involving identity theft and access device fraud. According to authorities, a brief but notable surge in bitcoin’s price was triggered by Council’s misuse of the SEC’s platform to disseminate false financial information.
As stated by the Department of Justice (DOJ), a SIM-swapping scheme was carried out by Council to take control of a victim’s mobile service, allowing him and his accomplices to obtain unauthorized access to the SEC’s official account on the social media platform X. With control of the account, a fraudulent post was published by the group, falsely declaring the approval of bitcoin exchange-traded funds (ETFs)—an announcement highly awaited by investors. The DOJ noted that the fabricated statement caused an immediate impact on the cryptocurrency market.
Immediately following the false announcement, the price of BTC increased by more than $1,000 per BTC. Following the correction, the value of BTC decreased by more than $2,000 per BTC.
A forged identification was used by Council to assume the identity of the account holder, and compensation in bitcoin was received for his involvement in the scheme. On January 10, 2024, when the SEC formally approved spot bitcoin ETFs, BTC was being traded at approximately $46,000.
The threat posed to the integrity of public markets by such actions was emphasized by federal authorities. Darren Cox, Acting Assistant Director of the FBI’s Criminal Investigative Division, highlighted the concern:
The deliberate takeover of a federal agency’s official communications platform was a calculated criminal act meant to deceive the public and manipulate financial markets.
It was noted that by disseminating false information to manipulate the markets, an attempt was made by Council to undermine public confidence and take advantage of the financial system.
