Bitcoin Price Crashes 20% After SEC Hack

Eric Council Jr., a 26-year-old from Huntsville, Alabama, was sentenced to 14 months in prison for his involvement in the hacking of the U.S. Securities and Exchange Commission’s (SEC’s) X account on January 9, 2024. Council Jr. and his co-conspirators posted false news claiming that the SEC had approved the first Bitcoin (BTC) exchange-traded fund in the U.S. This fraudulent activity was part of a broader scheme to manipulate the price of BTC.

In a press release on May 16, 2025, the U.S. Department of Justice (DOJ) announced that Council Jr. would also face three years of supervised release following his imprisonment. This form of parole is intended to ensure that he adheres to certain conditions and does not engage in further criminal activities. Council Jr. had previously pleaded guilty to conspiracy to commit aggravated identity theft and access device fraud in February 2024. He was arrested by the Federal Bureau of Investigation (FBI) agents in October 2023.

Council Jr.'s role in the hacking scheme involved carrying out a Subscriber Identity Module (SIM) swap. This technique involves convincing a mobile carrier to port a victim’s phone number to a SIM card controlled by the hacker. Council Jr. used an ID card printer to produce fake IDs of victims, whose personal data was supplied to him by his co-conspirators. He then used these fake IDs to gain access to the victim’s phone number, which allowed him to access the SEC’s X account and post the fake news. In return for his role in the hack, Council Jr. received payment in BTC.

The hacking incident occurred against a backdrop of heightened anticipation in the crypto industry. On August 29, 2023, the District of Columbia Court of Appeals ruled that the SEC was wrong to reject Grayscale’s spot BTC ETF application without proper cause. This decision raised optimism that the SEC would review and potentially approve the first spot Bitcoin ETF. Council Jr. and his accomplices exploited this market sentiment by announcing a fake approval from the SEC’s genuine X account, aiming to manipulate the price of BTC.

The immediate impact of the fake news was significant. The price of BTC increased by more than $1,000 after the posting of the false information. However, once the SEC chair, Gary Gensler, acknowledged the hack and dismissed the message as fake, the BTC price crashed by over $2,000 per BTC. This price fluctuation resulted in a total of $220 million in liquidations and wiped around $50 billion off Bitcoin’s market capitalization within 24 hours following the posting of the fake news.

FBI Criminal Investigative Division Acting Assistant Director Darren Cox described the hack as "a calculated criminal act meant to deceive the public and manipulate financial markets." He emphasized that by spreading false information to influence the markets, Council Jr. attempted to erode public trust and exploit the financial system. This incident highlights the vulnerabilities in digital communication platforms and the potential for cyber fraud to have far-reaching economic consequences.