SEC Hack Leads to FBI Arrest: Alleged Bitcoin Manipulation Scandal

 

Alabama Man Arrested for Hacking SEC’s X Account in Alleged Bitcoin Price Manipulation Scheme

A 25-year-old Alabama man, Eric Council Jr., was arrested on Thursday for allegedly hacking into the U.S. Securities and Exchange Commission's (SEC) X account earlier this year as part of a scheme to manipulate bitcoin prices, U.S. prosecutors revealed.

The hack took place in January when a false message was posted from the SEC’s official @SECGov account, claiming that the agency had approved bitcoin exchange-traded funds (ETFs). This misleading announcement caused a rapid spike in the price of bitcoin, raising its value by $1,000 before the SEC quickly removed the post and clarified that it was unauthorized.

Alleged Hack and Price Manipulation

The hacking incident exploited a SIM-swapping technique, a method often used by cybercriminals to take control of phone numbers by rerouting them to new devices. This allows hackers to bypass two-factor authentication and gain access to sensitive accounts. According to federal prosecutors, Council was part of a larger conspiracy involving unnamed co-conspirators who identified a victim with access to the SEC’s X account, known only as "C.L.".

Council was reportedly instructed on how to perform the SIM swap to gain access to the victim's phone. Once control of the SEC's X account was established, the false bitcoin announcement was posted. For his role in the scheme, Council allegedly received a bitcoin payment after the price spike and then drove to Birmingham, Alabama, to return the iPhone used in the crime.

Fallout and Investigation

The incident drew widespread criticism of the SEC and raised concerns about security on X (formerly known as Twitter), particularly since its acquisition by Elon Musk in October 2022. Social media platforms have become frequent targets of cyberattacks, and this breach reignited the debate about how secure such platforms are, especially when they are used by government agencies and financial regulators.

The SEC acknowledged the efforts of law enforcement in the case. "The SEC thanks law enforcement for their vigilance in seeking accountability for the breach of the SEC's X account," said a spokesperson.

After the hacking event, Council allegedly performed internet searches such as “what are some signs that the FBI is after you” and sought information on how to delete accounts on Telegram, a popular encrypted messaging app often used by cybercriminals.