A hacker behind the fake Bitcoin ETF announcement has been arrested by the FBI, causing market turmoil.
FBI Arrests Hacker in SEC Breach
Eric Council Jr., a 25-year-old from Athens, Alabama, was arrested by the FBI for hacking the Securities and Exchange Commission’s (SEC) X account. The incident, which occurred in January, led to a false announcement about Bitcoin exchange-traded funds (ETFs).
According to an Oct. 17 report, Council Jr. faces charges of conspiracy to commit identity theft and access device fraud. Federal authorities revealed that he was part of a group responsible for the SEC hack. On January 9, the group posted a fraudulent message claiming that the SEC had approved Bitcoin ETFs.
Market Impact of the Fake Post
The fake announcement caused a rapid spike in Bitcoin’s price by over $1,000. Markets reacted swiftly, sending shockwaves through the financial sector. However, within 15 minutes, SEC Chair Gary Gensler debunked the claim, clarifying that the commission had not approved any Bitcoin ETFs. He also confirmed that the SEC’s X account had been compromised.
SIM Swap Attack Method
Council Jr. used a “SIM swap” attack to gain control of the SEC’s X account. This method involves tricking a phone service provider into transferring control of a victim’s phone number to a new SIM card. With this control, hackers bypass two-factor authentication and access accounts.
US Attorney Matthew Graves described the dangers of SIM swapping schemes. He emphasized that these attacks can lead to significant financial losses and exposure of personal information. Graves also underscored that the conspirators manipulated financial markets through this illegal access.
Hacker’s Scheme and Bitcoin Payment
Council Jr., using aliases like “Ronin” and “Easymunny,” obtained personal details of an individual to steal their identity. He then produced a fake ID and acquired a SIM card linked to the victim’s phone number. After purchasing an iPhone, he used the device to retrieve access codes for the SEC’s X account. The stolen access codes were handed over to his co-conspirators, who posted the fake Bitcoin ETF approval. In exchange, Council Jr. received payment in Bitcoin.
Following the incident, Council Jr. returned the iPhone for cash. The FBI investigation revealed that he later conducted internet searches about the SEC hack and potential FBI investigations, likely out of concern over getting caught.
Legal Consequences and SEC’s Response
Council Jr. is charged with illegally using the identity of an authorized individual to gain access to the SEC’s account. His co-conspirators used this unauthorized access to manipulate Bitcoin’s price. Principal Deputy Assistant Attorney General Nicole M. Argentieri stated that the false announcement led to a sharp increase in Bitcoin’s price, followed by a steep decline. She stressed the importance of combating cybercrime, particularly when it threatens financial market integrity.
SEC Approves Bitcoin ETFs Shortly After Incident
Interestingly, just one day after the fake post, the SEC approved 11 Bitcoin ETFs on Wall Street. These funds now manage over $63.5 billion in assets. The incident highlighted the vulnerability of financial markets to cyberattacks and the need for stricter safeguards.
