Eric Council Jr. has been sentenced to 14 months in prison for his role in the January 2024 hack of the Securities and Exchange Commission’s X (formerly Twitter) account, the U.S. Department of Justice announced Friday.
The incident drew national attention after the compromised account was used to post a false tweet claiming that the SEC had approved spot Bitcoin exchange-traded funds (ETFs).
The move had briefly caused the price of Bitcoin to surge by over $1,000.
Eric Council Jr. Pleads Guilty in SEC X Account Hack Case
Eric Council Jr. pleaded guilty in February in U.S. District Court in Washington, D.C., to conspiracy to commit aggravated identity theft and access device fraud.
Prosecutors said Council assisted others in gaining unauthorized access to the SEC’s social media account, which is closely watched by investors and markets alike.
The false announcement, though quickly debunked, had an immediate and measurable effect on the cryptocurrency market.
The hack underscored the potential risks of misinformation and digital security lapses within regulatory agencies.
The DOJ emphasized that manipulating public trust and financial markets through cybercrime will be met with serious consequences.
Council’s sentencing reflects the growing seriousness with which authorities are treating cyberattacks that target sensitive government accounts, particularly those with the power to influence financial markets in real time.
Also Read: US Federal Prosecutors Push for 8 Years Prison Term for Hacker Behind Mango Markets Exploit
Fake SEC Tweet Sparks Brief Bitcoin Surge on ETF Claim
Bitcoin’s price initially surged following the fake tweet from the SEC’s hacked X account. The post on the account had falsely claimed approval of spot Bitcoin ETFs.
However, the rally was short-lived. Once the SEC regained control of the account and clarified that the tweet was false, the cryptocurrency’s value quickly reversed course, dropping by more than $2,000.
The incident highlights the market’s sensitivity to regulatory news, even when it’s misinformation.
Also Read: Coinbase Faces SEC Scrutiny Amid Exchange Breach, But Growth Outlook Remains Strong
SEC Approves Bitcoin ETFs Day After Hack Falsely Announced It
In an ironic twist, just one day after its official X account was hacked to falsely announce the approval of spot Bitcoin ETFs, the SEC confirmed it had approved rule changes permitting the launch of such ETFs.
The actual news came after the damage caused by the fake tweet had already rippled through the crypto markets.
In their sentencing memorandum, prosecutors noted that a group known for supporting hackers posted a video on X in February, allegedly featuring Council making a statement.
The video’s timing and message suggested continued alignment with the hacker community, raising concerns about the Council’s remorse and future conduct. Despite this, the judge opted for a more lenient sentence.