The FBI has arrested a suspect in connection with the January hacking of the Securities and Exchange Commission’s (SEC) X account, a cyberattack that caused a temporary spike in Bitcoin’s price. The suspect, identified as 25-year-old Eric Council Jr. from Athens, Alabama, was taken into custody on Thursday morning. This arrest marks a significant development in the investigation into a high-profile incident that rattled both the cryptocurrency market and the broader financial sector.
In a press release, the Department of Justice (DOJ) detailed Council’s involvement in the unauthorized takeover of the SEC’s X account, which occurred on January 9, 2024. The hackers used the compromised account to post a fraudulent message that read, “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.” This post created chaos in the financial markets, as it appeared to signal official approval for Bitcoin exchange-traded funds (ETFs) by the SEC.
Upon the release of this false information, Bitcoin’s value skyrocketed, rising by more than $1,000 per Bitcoin in a short period. However, once the SEC regained control of the account and issued a statement clarifying that the original post was unauthorized and the result of a security breach, Bitcoin’s price plummeted, dropping by approximately $2,000. The rollercoaster effect caused by the hack led to significant market disruptions, leaving traders and investors scrambling to adjust to the fluctuating value.
The incident underscored vulnerabilities in both social media platforms and financial markets, raising concerns about the security of information disseminated through official channels. While the SEC quickly corrected the misinformation, the damage to Bitcoin’s price and market confidence was already done.
Council is alleged to have gained control of the SEC’s X account through a technique known as a “SIM swap.” SIM swapping involves tricking mobile service providers into transferring a victim’s phone number to a new SIM card controlled by the attacker. With access to the victim’s phone number, hackers can bypass two-factor authentication, gaining control over email, social media accounts, and other sensitive information.
U.S. Attorney Matthew Graves highlighted the dangers of SIM swapping in a statement, emphasizing the widespread impact of these schemes: “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.”
The DOJ’s press release outlined that Council and his co-conspirators used this technique to hijack the phone number of an individual with access to the SEC’s X account. Once they had control of the account, the hackers posted the fake Bitcoin ETF announcement, deliberately manipulating the cryptocurrency market for their own gain.
Nicole Argentieri, Principal Deputy Assistant Attorney General for the DOJ’s Criminal Division, underscored the significance of the case. “Council, Jr.’s co-conspirators then allegedly used this unauthorized 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,” she explained. “Council’s indictment underscores the Criminal Division’s commitment to countering cybercrime, especially when it threatens the integrity of financial markets.”
Council now faces serious charges for his involvement in the hack, which could carry significant legal penalties. The SEC, in its statement following the hack, reaffirmed its commitment to cybersecurity and protecting the integrity of financial markets from such malicious activities.
This case highlights the increasing complexity of cybercrime in the financial world, where hackers are not only targeting individuals but also major institutions to manipulate markets. The involvement of sophisticated techniques like SIM swapping in such a high-profile attack points to the need for stronger security measures across both financial systems and digital platforms.
As the legal process unfolds, Council’s arrest may lead to further revelations about his co-conspirators and the full extent of the operation. It also serves as a reminder of the critical importance of cybersecurity, especially as digital assets and social media continue to play an integral role in financial markets.
