FBI Arrests Man Behind SEC Bitcoin ETF Scam, Causing $1,000 BTC Price Surge in January

• Eric Council Jr. used a SIM swap to hack the SEC’s X account and falsely claim Bitcoin ETF approval, causing price manipulation.
• The SEC regained control of its X account after hackers’ unauthorized Bitcoin ETF post caused BTC to spike by $1,000.
• Council faces charges for conspiracy and cyber fraud after using a SIM swap to access the SEC X account and manipulate Bitcoin prices.

The FBI has arrested Eric Council Jr., 25, of Athens, Alabama, for his alleged involvement in a January 2024 hack of the U.S. Securities and Exchange Commission’s (SEC) X account. 

Council, along with co-conspirators, is accused of posting a fake message from the SEC Chair, which caused the price of Bitcoin (BTC) to spike by over $1,000. The arrest was announced today, and Council is expected to appear in federal court in the Northern District of Alabama.

SIM Swap Used in SEC Account Takeover

According to the indictment, the attack occurred on January 9, 2024, when Council and his collaborators gained unauthorized access to the SEC’s X account. They did so through a method known as SIM swapping, a technique that involves fraudulently transferring control of a phone number from one SIM card to another. 

Council allegedly used a fake identification card to access the victim’s phone number, allowing him to retrieve account access codes linked to the SEC X account. The conspirators then posted a fraudulent tweet, falsely claiming that the SEC had approved Bitcoin ETFs, leading to a rapid price increase of BTC.

FBI Investigates Market Manipulation

Shortly after the unauthorized tweet, the SEC regained control of its X account and confirmed the hack, leading to a $2,000 drop in Bitcoin’s value. The incident occurred at a time when the SEC was still debating the approval of Bitcoin exchange-traded funds (ETFs). 

The FBI’s Criminal and Cyber Division investigated the attack, identifying Council as a key player in the scheme. Council allegedly received Bitcoin payments for carrying out the SIM swap and later attempted to cover his tracks by returning the phone used in the crime and conducting online searches about SEC hacks and FBI investigations.

U.S. Attorney’s Office Focuses on Cyber Fraud

The U.S. Attorney’s Office emphasized the seriousness of SIM swapping, noting its potential to undermine financial markets. U.S. Attorney Matthew Graves stated that the government is committed to holding accountable those who use cyber-enabled fraud to manipulate markets. 

Council now faces charges of conspiracy to commit aggravated identity theft and access device fraud. The case is being prosecuted by the DOJ’s Criminal Division and the U.S. Attorney’s Office for the District of Columbia.