The Federal Bureau of Investigation (FBI) arrested on Thursday an Alabama man who is allegedly behind the hacking of the U.S. Securities and Exchange Commission (SEC)’s account on social media platform X last January.
The United States Department of Justice says Eric Council Jr. is accused of conspiring with others to take unauthorized control of SEC’s X account and fraudulently using SEC chair Gary Gensler’s name to prematurely announce the approval of Bitcoin (BTC) exchange-traded fund (ETF).
According to X, the regulator did not set up multi-factor authentication (MFA) for its profile.
The fake announcement caused the price of Bitcoin to increase by more than $1,000 and then drop by more than $2,000 after the SEC regained control of its X account and declared the statement to be unauthorized and the result of a security breach.
Council is said to have carried out the hack through an unauthorized Subscriber Identity Module (SIM) swap, which involves fraudulently inducing a cellphone carrier to reassign another person’s contact number to a SIM card controlled by the bad actor.
The accused allegedly used the stolen identity of a person who had access to SEC’s X account to take over that person’s cellphone number and access the social media accounts linked to the phone number, enabling the premature post about Bitcoin ETFs.
Says FBI Criminal Investigative Division Assistant Director Chad Yarbrough,
“The defendant allegedly deceived the public by impersonating the victim and making fraudulent statements on behalf of the SEC. The FBI and our partners will continue to investigate and hold accountable those who attempt to manipulate financial markets for their own gain.”
Council is charged with one count of conspiracy to commit aggravated identity theft and access device fraud. He faces up to five years of prison time.
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