Alabama Man Sentenced for Hacking SEC Account

Eric Council Jr., a 26-year-old from Alabama, was sentenced for a SIM-swap attack on the SEC’s Twitter account, falsely announcing Bitcoin ETF approvals in January 2024.

SEC Account Breach Details

Eric Council Jr., a resident of Alabama, executed a sophisticated SIM-swap attack on the SEC’s X account. This breach led to a false announcement about Bitcoin ETF approvals, causing significant market reactions. The sentencing involved 14 months in prison.

The Impact on Financial Markets

Council Jr. impersonated an SEC employee, persuading an AT&T store staffer to issue a replacement SIM card. The manipulation used the account to falsely broadcast Bitcoin’s ETF approval, creating immediate market volatility.

Immediate effects included a temporary spike in Bitcoin (BTC) prices by over $1,000, followed by a sharp drop when the falsity was clarified. The incident caused brief but intense volatility, affecting investor confidence momentarily.

The intentional use of an agency’s communications platform was a calculated criminal act aimed at deceiving the public and manipulating financial markets. By disseminating false information to sway the markets, Council sought to undermine public confidence and take advantage of the financial system.” – Darren Cox, Acting FBI Assistant Director, U.S. Department of Justice

Lessons and Preventive Measures

This hack exemplified the risks associated with social engineering in digital securities, marking a calculated attempt to manipulate financial perceptions. Regulatory bodies responded with official statements, emphasizing integrity and system security, but no sustained market impact was noted. According to the SEC spokesman, “The SEC’s @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff.”

Eric Council Jr.’s case emphasizes regulatory focus on protecting economic systems from manipulation. Future preventive measures may involve enhanced digital communication security protocols. The incident reinforces financial market regulatory safeguards, protecting market integrity against such fraudulent activities.