U.S. SEC Social Media Account Hacked, Criminal Sentenced 14 Months in Prison: Fake News Triggers Spiked Bitcoin Prices

A man from Alabama has been sentenced to 14 months in prison and three years of supervised release for hacking the U.S. Securities and Exchange Commission's (SEC) X account.

The SEC said the 26-year-old man, Eric Council Jr., pleaded guilty to conspiracy to commit identity theft and device access fraud in February.

Council allegedly took control of the SEC's X account and posted false news that the SEC had approved a Bitcoin Exchange Traded Funds, a decision highly anticipated by the market, according to court documents.

His illegal behavior spiked the Bitcoin price. The price of Bitcoin increased by at least $1,000 after the fake news was released, and the price fell by at least $2,000 after clarification.

The SEC stated that Council used SIM Swap to take control of the SEC's X account. The criminals fraudulently induced a cellular phone carrier carriers to reassign the phone number from victim’s SIM card to the card controlled by the criminals to access social media accounts or virtual currency accounts linked to that phone number.

In addition, Council used an ID printer to forge a fake ID card with the victim's personal information printed on it.

The criminals impersonated the victim, obtained the victim's cell phone number, and ultimately took over the SEC's X account. Council's co-conspirators posed as the SEC chairman to release fake news, and Council himself received a bitcoin payment in return.

“Council and his co-conspirators used sophisticated cyber means to compromise the SEC’s X account and posted a false announcement that distorted important financial markets,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “Prosecuting those who seek to enrich themselves by threatening the integrity of digital assets through fraud is critical to protecting U.S. interests. ”

“Schemes of this nature threaten the health and integrity of our market system,” said U.S. Attorney Jeanine Pirro for the District of Columbia. “SIM swap schemes threaten the financial security of average citizens, financial institutions, and government agencies. Don’t fool yourself into thinking you can’t be caught. You will be caught, prosecuted, and will pay the price for the damage your actions create.”