A 25-year-old Alabama resident, Eric Council Jr., has been apprehended by the United States Federal Bureau of Investigation (FBI) on charges of hacking the official ‘X’ account of the Securities and Exchange Commission (SEC). Allegations include conspiracy to engage in aggravated identity theft and access device fraud.
Federal authorities level the claim that Council Jr. was a member of the team of hackers that broke into the SEC’s X account in January 2024, subsequently posting a fictitious message claiming the SEC had endorsed the first Bitcoin exchange-traded funds (ETFs) in the United States. This disinformation led to a rise in Bitcoin’s value by over $1,000 post-publication, instigating consequential market repercussions.
A quarter of an hour after the faux post, the news was denied by SEC Chair Gary Gensler, clarifying that the agency had “not approved the listing and trading of spot bitcoin exchange-traded products”, and that their account had been illegally accessed.
It is alleged that the hackers, including Council Jr., used a “SIM swap” process – a method frequently employed in fraudulent activities where hackers gain access to a victim’s phone number and thereby override two-factor identification to breach the victim’s accounts.
Council Jr. is reported to have procured personal data, including ID, from his criminal associates which he used to generate fake IDs through his personal card printer. He then used this fake identity to acquire a SIM card linked to the unsuspecting victim’s phone.
Acquiring access codes for the SEC’s X account via the illicitly obtained SIM card inserted into a new iPhone, he passed these on to his accomplices, enabling them to post fraudulent content on the X account, giving the impression the SEC had approved the ETFs. Council Jr. subsequently received payment in Bitcoin equivalent and later tried to return the iPhone for cash.
The FBI’s investigation uncovered that Council followed up these criminal activities by conducting online searches relating to similar hacking crimes, and how to evade detection if under investigation.
Further information uncovered since the initial arrest has led to the SEC officially approving the listing of 11 Bitcoin ETFs the very next day, with these funds now holding over $63.5 billion in assets.