An Alabama man, Eric Council Jr., has been sentenced to 14 months in prison and three years of supervised release for his involvement in the unauthorized takeover of the U.S. Securities and Exchange Commission's (SEC) social media account on X, previously known as Twitter.
Council, 26, from Huntsville, admitted guilt to conspiracy charges related to aggravated identity theft and access device fraud earlier this year. The court documents revealed that Council collaborated with others to hijack the SEC’s X account and falsely announced that Bitcoin (BTC) Exchange Traded Funds (ETFs) had been approved by the SEC—a decision eagerly awaited by market participants. This false announcement caused an immediate spike in BTC prices by over $1,000 per BTC before a subsequent correction led to a decrease of more than $2,000 per BTC.
The fraudulent takeover was executed through a Subscriber Identity Module (SIM) swap orchestrated by Council. A SIM swap is a form of fraud where a perpetrator tricks a cellular provider into transferring a victim's phone number to a SIM card controlled by the perpetrator, granting them access to accounts linked to that number. As part of the scheme, Council used an ID card printer to produce a fake identification using personally identifiable information provided by co-conspirators. He then impersonated the victim to gain control over their phone number and subsequently accessed the SEC’s X account. His co-conspirators posted under the guise of the SEC Chairman about the false ETF approval. For his role, Council received payment in BTC.
Matthew R. Galeotti from the Justice Department’s Criminal Division stated: “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.” He emphasized that prosecuting such acts is vital for protecting U.S. interests.
U.S. Attorney Jeanine Pirro for the District of Columbia remarked: “Schemes of this nature threaten the health and integrity of our market system... Don’t fool yourself into thinking you can’t be caught.”
FBI Criminal Investigative Division Acting Assistant Director Darren Cox commented: “By spreading false information to influence the markets, Council attempted to erode public trust and exploit the financial system.”
Amanda James from Securities and Exchange Commission Office of Inspector General noted: “Today’s sentencing exemplifies SEC OIG’s commitment to holding bad actors accountable.”
The case was investigated by both FBI Washington Field Office and SEC Office of Inspector General.
Prosecutors include Trial Attorney Ashley Pungello from Computer Crime and Intellectual Property Section, Trial Attorney Lauren Archer from Fraud Section, and Assistant U.S. Attorney Kevin Rosenberg for D.C., with assistance from Cyber Fellow Paul M. Zebb III.
For more details on preventing SIM swapping frauds, visit www.ic3.gov/PSA/2024/PSA240411.