Alabama Man Pleads Guilty in SEC Social Media Hack Case

Athens, AL – An Alabama man, Eric Council Jr., has pleaded guilty to charges related to a high-profile hack of a U.S. Securities and Exchange Commission (SEC) social media account that occurred in January 2024. This operation was aimed at manipulating the price of bitcoin, leading to a significant but fleeting surge in its value.

Background of the Incident

Eric Council Jr., 25, from Athens, entered his guilty plea for identity theft in the U.S. District Court in Washington on Monday. Court records indicate that his sentencing is scheduled for May 2024. Council’s involvement in the hacking scheme was part of a broader effort to illegally announce the approval of bitcoin exchange-traded funds (ETFs).

According to prosecutors, Council was arrested in October after being identified as a key participant in the breach of the SEC’s account on the platform X, previously known as Twitter. The compromised account was used by co-conspirators to post a false announcement claiming, “The SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges.”

Impact on Bitcoin’s Price

The unauthorized announcement triggered a rapid spike in the price of bitcoin, which briefly rose by over $1,000—jumping from approximately $46,730 to just below $48,000. However, the increasing excitement was short-lived. Following the post, then-SEC Chairman Gary Gensler promptly confirmed the breach on his personal account, clarifying that the SEC’s account had been compromised. In response, the price of bitcoin fell to about $45,200 after the SEC denied the fraudulently claimed approval. Just a day later, the SEC did officially approve the first bitcoin ETFs. In recent months, bitcoin prices have surged to around $100,000.

Details of the Hack

The hacking operation involved a method known as “SIM swapping.” Council utilized a fake identification to impersonate a person with access to the SEC’s X account. His actions led him to convince a cellphone store to issue a new SIM card linked to that individual’s phone number. By gaining control of the phone number, Council was able to receive access codes needed to breach the SEC’s social media account. These codes were subsequently shared with other individuals involved in the hacking scheme, who were responsible for the troublesome post.

Prosecutors revealed that Council was paid in bitcoin for his contributions to the operation, reportedly earning about $50,000 in total. Before his arrest, his search history included queries such as “how can I know for sure if I am being investigated by the FBI” and “federal identity theft statute,” pointing to a clear awareness of the legal implications of his activities.

The Future

As Eric Council Jr. awaits sentencing, the case highlights ongoing concerns about cybersecurity and the potential for digital platforms to be exploited for financial manipulation. With similar incidents on the rise, regulators and financial institutions are likely to increase their vigilance in order to protect against fraud and maintain the integrity of digital markets.

The SEC continues to bolster its protocols to safeguard against unauthorized access and to rebuild trust in its public communications, especially as the world of cryptocurrencies continues to evolve rapidly.