January 2024: Hacker of SEC’s X Account Sentenced to 14 Months for Cyber Fraud

Eric Council Jr. received a 14-month prison sentence for his involvement in the January 9, 2024, hacking of the U.S. Securities and Exchange Commission’s X account. Together with his associates, he disseminated false information claiming the SEC had approved the first Bitcoin exchange-traded fund in the United States.

In a statement issued on May 16, 2025, the U.S. Department of Justice announced that Council Jr. would also face three years of supervised release following his prison term.

The 26-year-old resident of Huntsville, Alabama, had entered a guilty plea to charges of conspiracy related to aggravated identity theft and access device fraud earlier in February. His arrest took place in October of the previous year by agents from the Federal Bureau of Investigation.

On August 29, 2023, the District of Columbia Court of Appeals determined that the SEC acted improperly by rejecting Grayscale’s application for a spot Bitcoin ETF without sufficient justification. The ruling mandated that the SEC review an application it had previously denied multiple times.

This court decision sparked optimism within the cryptocurrency sector, and many anticipated an SEC approval for the first spot Bitcoin ETF. Council Jr. and his accomplices seized this opportunity, using the SEC’s legitimate X account to announce a fake approval.

Documents from the court reveal that Council Jr. plotted to infiltrate the SEC’s X account to publish false information about the Bitcoin ETF approval to influence BTC’s market price. His contribution involved executing a Subscriber Identity Module (SIM) swap, wherein he deceived a mobile carrier into transferring a victim’s phone number to a SIM card under his control.

The DOJ indicated that Council Jr. created counterfeit identification cards using a printer to generate fake IDs of victims. These IDs were obtained through personal data provided by his co-conspirators. He exploited these fake identities to access the victims’ phone numbers and the SEC’s account to post the misleading information. For his involvement in the hacking of the SEC’s X account, Council Jr. received compensation in Bitcoin.

Shortly after the false information was released, the price of Bitcoin surged by over $1,000. However, following SEC Chair Gary Gensler’s acknowledgment of the hack, which labeled the hackers’ statement as false, the Bitcoin price plummeted by more than $2,000.

The price of Bitcoin rose to $48,000 after the false news was spread but then fell to $45,000 after Gensler’s clarification. Approximately $50 billion was eliminated from Bitcoin’s market capitalization within 24 hours of the deceptive announcement. This price fluctuation also resulted in $220 million worth of liquidations.

Darren Cox, Acting Assistant Director of the FBI’s Criminal Investigative Division, described the hack as a calculated criminal maneuver aimed at misleading the public and manipulating financial markets. He emphasized that by spreading false information to sway the markets, Council Jr. sought to undermine public trust and exploit the financial system.