An Alabama man was arrested by the FBI this morning in Athens, Alabama, on charges related to the January hack of the Securities and Exchange Commission’s social media account on X.
According to court documents, on or about January 9, Eric Council Jr., 25, of Athens, allegedly conspired with others to take unauthorised control of the SEC’s X account and, in the name of SEC Chair Gary Gensler, prematurely announced the approval of bitcoin Exchange Traded Funds.
Immediately following the false announcement, the price of bitcoin increased by more than $1,000 per bitcoin.
Shortly after this unauthorized post, the SEC regained control over its X account and confirmed that the announcement was unauthorized and the result of a security breach. Following this corrective disclosure, the value of BTC decreased by more than $2,000 per bitcoin.
The conspirators gained control of the SEC’s X account through an unauthorized Subscriber Identity Module (SIM) swap allegedly carried out by Council.
A SIM swap refers to the process of fraudulently inducing a cell phone carrier to reassign a cell phone number from the legitimate subscriber or user’s SIM card to a SIM card controlled by a criminal actor.
As part of the scheme, Council and the co-conspirators allegedly created a fraudulent identification document in the victim’s name, which Council used to impersonate the victim; took over the victim’s cellular telephone account; and accessed the online social media account linked to the victim’s cellular phone number to access the SEC’s X account and generate the fraudulent post in the name of SEC Chairman Gensler.
“The indictment alleges that Eric 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,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Council’s co-conspirators then allegedly used this unauthorised access to the X account to falsely announce that the SEC had approved listing bitcoin ETFs, which caused the price of bitcoin to rise by $1,000 and then fall by $2,000. Council’s indictment underscores the Criminal Division’s commitment to countering cybercrime, especially when it threatens the integrity of financial markets.”
“These SIM swapping schemes, where fraudsters trick service providers into giving them control of unsuspecting victims’ phones, can result in devastating financial losses to victims and leaks of sensitive personal and private information,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “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.”
“The defendant allegedly deceived the public by impersonating the victim and making fraudulent statements on behalf of the SEC,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “The FBI and our partners will continue to investigate and hold accountable those who attempt to manipulate financial markets for their own gain.”
“This criminal indictment demonstrates our commitment to holding bad actors accountable for undermining the integrity of the financial markets,” said Inspector General Deborah Jeffrey of the SEC.
A federal grand jury in the District of Columbia returned an indictment on October 10, charging Council with one count of conspiracy to commit aggravated identity theft and access device fraud. If convicted, he faces a maximum penalty of five years in prison.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
