Bitcoin Surges $1,000 on SEC Hack, Crashes $2,000 After Hoax

Eric Council Jr., a 26-year-old resident of Huntsville, Alabama, has been sentenced to 14 months in prison for his involvement in a social media hack that targeted the U.S. Securities and Exchange Commission’s (SEC) X account. The hack, which occurred in January 2024, involved Council using a SIM-swap technique to hijack a phone number associated with the SEC’s account. This allowed his co-conspirators to post false information claiming that the SEC had approved spot bitcoin exchange-traded funds (ETFs), a significant regulatory development that had been highly anticipated by the market.
The false post caused an immediate surge in the price of bitcoin, which rose by more than $1,000 within minutes. However, the price quickly crashed, losing more than $2,000 in value once the post was exposed as a hoax. The SEC later approved the launch of spot bitcoin ETFs in the same month, but the initial market reaction was driven by the false information spread through the hacked account.
Council was paid in bitcoin for his role in the hack. In addition to his prison sentence, he will also serve three years of supervised release. Federal prosecutors described the attack as a deliberate attempt to manipulate financial markets and undermine public trust. Acting FBI Assistant Director Darren Cox stated, “The deliberate takeover of a federal agency’s official communications platform was a calculated criminal act meant to deceive the public and manipulate financial markets. By spreading false information to influence the markets, Council attempted to erode public trust and exploit the financial system.”
This incident highlights the vulnerabilities in social media platforms and the potential for malicious actors to exploit them for financial gain. The use of SIM-swap techniques and fraudulent IDs to hijack accounts underscores the need for enhanced security measures to protect against such attacks. The case serves as a reminder of the importance of verifying information from official sources and the potential consequences of relying on unverified social media posts in financial decision-making.

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