Vulnerabilities of High-Profile Social Media Accounts Exploited to Pump Bitcoin Price

In a landmark case underscoring the vulnerabilities of high-profile social media accounts, 26-year-old Eric Council Jr. of Alabama was sentenced to 14 months in prison

A 26-year-old Alabama man has been sentenced to 14 months in prison for his role in a SIM swap attack that compromised the U.S. Securities and Exchange Commission’s (SEC) official X account and led to a false report of Bitcoin ETF approval.

Eric Council Jr., also known online as “Ronin” and “Agiantschnauzer,” was sentenced May 16 after pleading guilty earlier this year to one count of conspiracy to commit aggravated identity theft and access device fraud.

The SEC’s X account was compromised on January 9, 2024, when a post on the platform falsely announced the Commission’s approval of a spot Bitcoin ETF. At the time, then-SEC Chair Gary Gensler quickly rescinded the release, stating that the agency’s account had been “compromised.”

Bitcoin’s price rose by more than $1,000 in minutes after the fake announcement, and then-SEC Chair Gary Gensler quickly rescinded the release, stating that the agency’s small business administration grant had been compromised.

The post was made by hackers who had gained control of the account by performing a SIM swap on the SEC’s phone number. To do this, Council used a counterfeit ID made by a handheld ID printer to pose as an AT&T customer and obtain a replacement SIM card.

Council, 26, of Mobile, Alabama, was part of a group who also used the password reset codes to gain access to the X account. These codes were generated when the SEC attempted to reset its own account password after noticing suspicious activity.

During an FBI search of Council’s residence, agents discovered internet searches on his devices, including “How can I know for sure if I am being investigated by the FBI?”

The matter arose after the SEC had been applying to approve a number of exchange-traded products that track the price of Bitcoin.

Earlier this year, the SEC approved a number of spot Bitcoin exchange-traded products, adding 11 new ETFs such as Grayscale Bitcoin Trust and BlackRock’s IBIT.

The move was a watershed for cryptocurrency investing, as it opened up regulated markets to products that directly track the price of the world’s largest cryptocurrency.

Following the approval, several U.S. senators penned a letter to the SEC, raising concerns over the regulator’s handling of cryptocurrency and its potential impact on small investors.

In February, Council pleaded guilty in U.S. District Court in Washington, D.C., to conspiracy to commit aggravated identity theft and access device fraud.

Prosecutors recommended a two-year sentence, while defense counsel sought a sentence of just over a year.

The court ultimately imposed a 14-month term of imprisonment, to be followed by three years of supervised release.

The judge also ordered Council to forfeit $50,000, barred him from dark web access and imposed an order to have no further identity fraud.

“Eric Council Jr.’s sentencing brings both the perils of hacking into social media and the instant market impact of misinformation,” said Charles Glassman, an attorney at legal firm Michelman & Sonnenberg.

“As finance becomes electronic, constant caution and judicial notice must be maintained to have faith in regulatory commissions and not have our institutions be subject to theft and fraud.”