FBI Arrests Alleged Hacker in Spot Bitcoin False Tweet Probe
Eric Council is alleged to have been part of a scheme to post a fake message from the SEC indicating that spot bitcoin ETFs had received approval.
The Federal Bureau of Investigation arrested an Alabama man on Thursday on charges that he hacked into the Securities and Exchange Commission's official X account in January, part of a scheme to falsely send a message that the regulator had approved the first spot bitcoin exchange-traded funds.
In its indictment, the agency accused 25-year-old Eric Council of Athens, Ala. of conspiracy to commit aggravated identity theft and access device fraud.
"...On January 9, 2024, Council conspired with others to take unauthorized control of the @SECGov X account...and transmitted a fake post...falsely announcing, in part, 'Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges,'" according to the indictment, adding that bitcoin's price spiked by more than $1,000 in the immediate aftermath.
Ten spot bitcoin applications received the SEC's greenlight the following day to begin trading. Those funds and an 11th that debuted in March now manage more than $55 billion in assets, according to etf.com, and have fueled subsequent demand for crypto-focused investments.
The false tweet, which rippled through an investment community that had been expecting the approval for weeks, also underscored the volatility of digital assets, which often move on the latest social media utterances.
Read More: Spot Bitcoin ETF Wins Approval Amid SEC Tech Glitches
The indictment noted that the SEC regained control of its account shortly after confirming the unauthorized message that stemmed from the hack and that bitcoin's price then plunged by $2,000. Bitcoin was trading at roughly $45,000 then. It is currently changing hands near $69,000. Council received Bitcoin as payment for his services, the government said.
A SIM Card Scam
Council allegedly gained control of the SEC account via a SIM swap, a scheme in which scammers convince service providers to give them control of unsuspecting victims' phones. A SIM card (Subscriber Identity Module) is a chip that holds information identifying and verifying a cell phone subscriber.
According to the indictment, Council used identification information and a photo that he received from co-conspirators to create a fake ID that enabled him to acquire a SIM card linked to the victim's phone in Huntsville, Ala. He allegedly then bought a new phone that he used with the SIM card to access the @SECGov X account. He shared the code with his co-conspirators, who sent out the bogus post.
“SIM swapping is a method bad actors exploit to illicitly access sensitive information of an individual or company, with the intent of perpetrating a crime," said Principal Deputy Assistant Attorney General Nicole M. Argentieri of the U.S. Justice Department’s Criminal Division in a statement. "In this case, the unauthorized actor allegedly utilized SIM swapping to manipulate the global financial market."
