The feds are accusing a 25-year-old Yellowhammer State man of helping hack the SEC's X (Twitter) account as part of a conspiracy that also involved cryptocurrency prices and the ETF approval process.

Yesterday, federal prosecutors and law enforcement personnel revealed an eight-page indictment against Eric Council Jr., alleging that Council used a "SIM swap" to help co-conspirators temporarily take control of the X account of the U.S. Securities and Exchange Commission (SEC) to falsely announce that the regulatory agency had given its blessing to spot bitcoin exchange-traded products (ETPs). Prosecutors also confirms that the FBI arrested Council yesterday morning in Athens, Alabama, and Council is charged with conspiracy to commit identity theft and "access device fraud."

On January 9, 2024, someone used the @SECGov account on X to tweet, "Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges." Yet shortly thereafter, SEC staff tweeted that the prior announcement was the unauthorized result of a security breach. (This all happened one day before the SEC actually gave its blessing to spot bitcoin ETPs, on January 10, and two days before the first U.S. spot bitcoin ETPs debuted, on January 11.)

Prosecutors allege that Council (who, per the indictment, also goes by the handles "@Easymunny," "Ronin," and "AGiantSchnauzer") was sent "personal identifying information" (PII) about someone with access to the SEC's X account, and that Council then created a fake ID, claimed he was an FBI employee with a broken phone to get a new SIM card tied to the target, put that SIM card into a new iPhone, used the phone to reset the login information for the SEC's X account, and sent the new login info to someone else, for all which Council was allegedly paid bitcoin "and other virtual currencies." Afterwards, Council allegedly returned the iPhone for cash and used his computer to look up things like "what are some signs that the FBI is after you," "how long does it take to delete telegram account," "telegram sim swap," "federal identity theft statute," and "SECGOV hack."

The indictment does not name Council's co-conspirators, who allegedly paid him, sent him the necessary PII, and received and used the SECGOV login info to make the fake post. The indictment also does not reveal whose phone was allegedly spoofed in the scheme; that person is identified only as "victim C.L." (Perhaps C.L. is an SEC staffer or, given Council's alleged claims when acquiring a SIM card, perhaps C.L. is an FBI agent or employee.)

Matthew Graves, U.S. attorney for the District of Columbia, filed the indictment against Council in the United States District Court For the District of Columbia. He notes that "SIM swapping schemes ... can result in devastating financial losses to victims and leaks of sensitive personal and private information." Yet this time, the goal of the alleged conspirators appears to have been different.

"Here, the conspirators allegedly used their illegal access to a phone to manipulate financial markets," Graves states.

"In this case, the unauthorized actor allegedly utilized SIM swapping to manipulate the global financial market," states David Geist, Acting Special Agent in Charge of the FBI Washington Field Office's Criminal and Cyber Division.

"The indictment alleges that Eric Council, Jr. unlawfully accessed the SEC's account on X by using the stolen identity of a person who had access to the account to take over their cellphone number," states Nicole Argentieri, Principal Deputy Assistant Attorney General of the Criminal Division of the U.S. Justice Department. "Council, Jr.'s co-conspirators then allegedly used this unauthorized access to the X account to falsely announce that the SEC had approved listing Bitcoin ETFs, which caused the price of Bitcoin to rise by $1,000 and then fall by $2,000."

"Today's arrest demonstrates our commitment to holding bad actors accountable for undermining the integrity of the financial markets," states Deborah Jeffrey, Inspector General of the SEC.

"Council's indictment underscores the Criminal Division's commitment to countering cybercrime, especially when it threatens the integrity of financial markets," Argentieri states.

The case has been assigned to Amy Berman Jackson, a Senior United States District Judge in D.C. The prosectors are: Kevin Rosenberg, an Assistant United States Attorney; Ashley Pungello and Paul Zebb, trial attorneys from the the DoJ's Computer Crime and Intellectual Property Sectionn (CCIPS); and Lauren Archer, a DoJ trial attorney from the Fraud Section. John Hundscheid, AUSA from the Northern District of Alabama, also helped out with the case.

Investigators involved in the case include: the FBI Washington Field Office's Criminal and Cyber Division; the SEC-Office of Inspector General; the U.S. Attorney's Office for D.C.; the DoJ's Market Integrity and Major Frauds Unit (MIMF); CCIPS; and the FBI's Birmingham Field Office. 

Edited by: Neil Anderson, Managing Editor


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