Man charged in SEC bitcoin price spike hack

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Man charged in SEC bitcoin price spike hack

Man charged in SEC bitcoin price spike hack

Avishek Das | Lightrocket | Getty Images

FBI agents on Thursday arrested a 25-year-old Alabama man for his alleged role in the Jan. 9 hack of the Securities and Exchange Commission’s X account, which sent the price of bitcoin spiking by more than $1,000, the Department of Justice announced.

The man, Eric Council Jr., was ordered held without bail after was appeared later Thursday in U.S. District Court in Huntsville, Alabama, on charges of conspiracy to commit aggravated identity theft and access device fraud, according to the court clerk’s office.

Prosecutors allege that the Athens resident executed a so-called SIM swap attack to reassign the cellphone number of a person whose number was linked to the SEC’s X account to a subscriber identity module on a phone controlled by Council.

He then allegedly shared access codes to the X account with co-conspirators who used them to blast out a fake tweet in the name of the agency’s chairman, Gary Gensler.

The tweet said, “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”

Bitcoin’s price rose by more than $1,000 after the bogus tweet.

Shortly afterward, the SEC regained control of its social media account, and announced the tweet was false and the result of a hack.

“After that, the value of BTC decreased by more than $2,000 per bitcoin,” the DOJ noted.

The hack occurred when the SEC was considering approval of exchange-traded funds that held that cryptocurrency.

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A day after the hack, the SEC approved rule changes that allowed the creation of bitcoin ETFs in the United States.

Council, who used the online handles “Ronin,” “Easymunny,” and “AGiantSchnauzer,” allegedly was paid in bitcoin by co-conspirators for his role in the hack.

He then allegedly conducted Internet searches for terms such as “SECGOV hack,” “telegram sim swap,” “how can I know for sure if I am being investigated by the FBI,” and, “What are the signs that you are under investigation by law enforcement or the FBI even if you have not been contacted by them,” the DOJ said.

Council is due next in court in Huntsville on Tuesday for a detention hearing.

His case will be prosecuted in federal court in Washington, D.C., where a grand jury had issued the indictment against him.

CNBC has requested comment from the federal defender’s office, which was assigned to represent Council in the case.

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Council’s mother Kimberly Council told CNBC in an interview that she was surprised by news of her son’s arrest.

“My son has never been in any trouble whatsoever,” said Kimberly Council, who lives in Huntsville. “He’s never had so much as a detention on his academic experience in school.”

She said that she has not spoken to Eric since his arrest, and did not know if he had retained a lawyer for his criminal case.

Kimberly said Eric is currently not employed, but in the past he had supported himself by doing app-based food deliveries.

“I’m overwhelmed, as you can imagine,” by his arrest, Kimberly said.

“I love my son. He’s a special person. He’s always been quite unique. This is just something I hope he can work his way through.”

“I’m just trying to figure out what is really going on.”

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