The Justice Department said Eric Council Jr., a 25-year-old Alabama resident, was arrested on Thursday in connection with the unauthorized takeover of the Security and Exchange Commission's X account, which caused the value of Bitcoin to soar by $1,000 in January. He was arrested in the morning.
The hack occurred on January 9, the day before the SEC approved the long-awaited Spot Bitcoin exchange-traded fund. The hackers used the compromised accounts to falsely post approvals, according to a complaint filed in federal court in Washington, D.C. Shortly after, SEC Chairman Gary Gensler announced in a private statement that the claims were false and the posts were “unauthorized.”
“The SEC has not approved the listing and trading of spot Bitcoin exchange products,” Gensler wrote regarding X.
The fake post was deleted 25 minutes after the rise, but it was enough to move the market. Investors immediately rushed to buy Bitcoin, sending the price soaring by $1,000. After the corrections were made, the price dropped by $2,000, according to the indictment.
Council, also known online as “Ronin,” “AGiantSchnauzer” and @Easymunny, is charged with aggravated identity theft and conspiracy to commit access device fraud, according to U.S. Attorney Matthew M. Graves and others involved in the investigation. announced today. The indictment alleges that the council committed these crimes to manipulate the price of Bitcoin.
The indictment alleges that the councilors, who remain anonymous, accessed the accounts through a so-called “SIM swap.”
“A SIM swap attack is the process of fraudulently enticing a telecommunications company to reassign a mobile phone number from a legitimate subscriber or user’s SIM card to a criminal-controlled SIM card and phone,” the indictment states. This trick allows criminals to bypass multi-factor authentication.
The council and its co-conspirators allegedly created fraudulent identification documents in the victims' names, impersonated the people who had access to their accounts, and took over their mobile phone numbers. The @SECGov X account was linked to this phone number, allowing the hacker to access and post.
The council received payment in Bitcoin for performing the SIM swap. During the ensuing investigation, federal agents reportedly used his personal computer to conduct “SECGOV hacking,'' under the “Federal Identity Theft Act,'' and “to determine whether he was under investigation by the FBI.'' I discovered that I was searching for “How do I know?”
“In this case, fraudsters allegedly used SIM swapping to manipulate global financial markets,” FBI Acting Special Agent in Charge Geist said in a statement. “The FBI will continue to work tirelessly with our law enforcement partners across the country and around the world to hold accountable those who break American laws.”
If convicted, the council could face up to five years in prison.
