• The FBI arrested Eric Council Jr. for hacking the SEC’s X account and falsely posting that Bitcoin ETFs were approved, causing a brief market surge of $1,000 before a sharp drop of $2,000.
• Council allegedly used a SIM swap technique to gain access to the SEC’s account, enabling co-conspirators to manipulate Bitcoin’s price and profit from the market fluctuations.

The FBI has arrested 25-year-old Eric Council Jr. from Athens, Alabama, in connection with the unauthorized takeover of the U.S. Securities and Exchange Commission’s (SEC) X (formerly Twitter) account. Council’s actions led to a false announcement regarding Bitcoin exchange-traded funds (ETFs), resulting in significant market fluctuations.

“Today’s arrest demonstrates our commitment to holding bad actors accountable for undermining the integrity of the financial markets,” said SEC Inspector General Jeffrey.

The breach occurred on January 9, 2024, when a fake post on the SEC’s X account falsely claimed that Bitcoin ETFs had been approved for listing on all national securities exchanges.

Following the post, Bitcoin’s price surged by $1,000, as the news spread rapidly through the market. However, just as quickly, the cryptocurrency dropped by $2,000 when the SEC regained control of the account, deleted the tweet, and confirmed the post was the result of a hack. The SEC approved the ETFs a day later, but the incident underscored the dangers of cyber-enabled market manipulation.

Council allegedly gained access to the SEC’s account through a SIM swap, a type of attack where a fraudster tricks a mobile service provider into switching a victim’s phone number to a new SIM card controlled by the hacker. This allowed Council and his co-conspirators to bypass authentication measures and post the fraudulent message.

U.S. Attorney Matthew Graves emphasized the seriousness of these attacks: “SIM swapping schemes, where fraudsters trick service providers into giving them control of unsuspecting victims’ phones, can result in devastating financial losses.”

The Department of Justice unsealed an indictment against Council on charges of conspiracy to commit aggravated identity theft and access device fraud.

FBI Acting Special Agent David Geist highlighted the broader implications, stating, “SIM swapping is a method bad actors exploit to illicitly access sensitive information… In this case, the unauthorized actor allegedly utilized SIM swapping to manipulate the global financial market.”

Council’s arrest marks a significant step in addressing cyber-enabled financial crimes, which have increasingly targeted major institutions like the SEC. The case is being investigated by the FBI Washington Field Office, with assistance from the SEC’s Office of Inspector General and other law enforcement agencies.