A Huntsville man was sentenced on Friday to 14 months in prison and three years of supervised release for his role in the unauthorized takeover of the U.S. Securities and Exchange Commission’s (SEC) account on X to tweet out false positive news about bitcoin.
Eric Council, Jr., 26, pleaded guilty to conspiracy to commit aggravated identity theft and access device fraud in February. According to court documents, Council conspired with others to take control of the SEC’s X account in January 2024 and falsely announce that the SEC approved Bitcoin (BTC) Exchange Traded Funds (ETFs), a decision highly anticipated by the market.
Immediately following the false announcement, the price of BTC increased by more than $1,000 per BTC. Following the correction, the value of BTC decreased by more than $2,000 per BTC.
The conspirators gained control of the SEC’s X account through an unauthorized Subscriber Identity Module (SIM) swap carried out by Council. A SIM swap is a form of sophisticated fraud where a criminal actor fraudulently induces a cellular phone carrier to reassign a cellular phone number from a victim’s SIM card to a SIM card controlled by the criminal actor, in order to access a victim’s social media or virtual currency accounts.
As part of the scheme, Council used an identification card printer to create a fraudulent identification card with a victim’s personally identifiable information obtained from co-conspirators. Council used the identification card to impersonate the victim and gain access to the victim’s phone number for the purpose of accessing the SEC’s X account. Council’s co-conspirators then posted in the name of the SEC chairman, falsely announcing the BTC ETF approval. Council received payment in BTC from co-conspirators for his role.
“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. The Department of Justice is committed to holding accountable individuals who commit cyber fraud and harm investors.”
U.S. Attorney for the District Jeanine Pirro said, “Schemes of this nature threaten the health and integrity of our market system.”
“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,” she added.
FBI Criminal Investigative Division acting assistant director Darren Cox said, “The deliberate takeover of a federal agency’s official communications platform was a calculated criminal act meant to deceive the public and manipulate financial markets.”
“By spreading false information to influence the markets, Council attempted to erode public trust and exploit the financial system. Today’s sentencing makes clear that anyone who abuses public platforms for criminal gain will be held accountable,” he added.
The FBI Washington Field Office and SEC Office of Inspector General investigated the case.
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