The US government has asked a federal judge to impose a two-year sentence for Eric Council Jr., the individual who helped post a fake message announcing the approval of Bitcoin exchange-traded funds through the Securities and Exchange Commission’s (SEC’s) X account.
In a May 12 filing in the US District Court for the District of Columbia, prosecutors recommended Judge Amy Berman Jackson sentence Council to two years in prison for his role in posting a message to the social media platform X suggesting that the SEC had approved spot Bitcoin (BTC) exchange-traded funds (ETFs) for the first time in January 2024. The fake announcement, which shook markets in the roughly 24 hours before the regulator actually approved spot Bitcoin ETFs, led to the arrest of Council.
“This case deserves a guidelines range prison sentence,” said US prosecutors. “Defendant profited through a sophisticated fraud scheme involving fraudulently produced identification documents, a series of misrepresentations at telecommunication stores, and the transmission of password reset codes for victim online accounts to co-conspirators located in the United States and abroad. This conduct deserves a significant penalty.”
As of May 12, Council’s legal team had not filed a response to the sentencing recommendation. He is scheduled to appear before Jackson on May 16.
Council pleaded guilty to being part of a group that took control of the SEC’s X account through a SIM swap attack. With control of the regulator’s social media account, the hackers posted a fake message announcing the approval of spot Bitcoin ETFs. The SEC quickly removed the message and announced official approval of the crypto investment vehicles the following day.
Many in the crypto industry had been anticipating whether the SEC would approve or disapprove of listing spot BTC investment vehicles on US exchanges when the fake X post appeared. The price of Bitcoin surged by more than $1,000 before then-SEC Chair Gary Gensler refuted the false post’s claims.
DOJ leadership change-up under Trump
The Council case and others will be decided under US Attorney picks who have not received confirmation in the Senate. President Donald Trump appointed interim leadership for the Eastern District of New York, the Southern District of New York, and the District of Columbia after facing pushback from Democrats.
It’s unclear how the president’s influence could affect the Justice Department pursuing criminal cases involving digital assets, given his ties to the industry and his own crypto holdings. In New York’s Southern District, a judge ordered former Celsius CEO Alex Mashinsky to 12 years in prison after a December 2024 guilty plea.
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