Council participated in the hack of the SEC’s X account, posting a false Bitcoin ETF approval message.
Prosecutors call Council’s actions part of a sophisticated fraud scheme involving international co-conspirators.
The fake ETF announcement temporarily disrupted Bitcoin's price, signaling the influence of misinformation in the crypto market.
The US government has recommended a two-year prison sentence for Eric Council Jr., who was involved in a high-profile hacking incident. Council said in court that he took part in breaking into the Securities and Exchange Commission's (SEC) X account in January 2024. Because of the hack, a false notice about Bitcoin ETF approval was put out, leading to serious market problems. May 12 saw the DOJ send its recommendation for sentencing, and Council was to face sentencing on May 16 in front of Judge Amy Berman Jackson.
Council's Role in the SEC X Account Hack
Council was part of a group responsible for taking control of the SEC’s official X account via a SIM swap attack. Once in control of the account, the hackers posted a false message claiming that the SEC had approved spot Bitcoin ETFs. This caused a temporary surge in Bitcoin’s price, which increased by over $1,000 before SEC officials refuted the claim.
The SEC removed the post and made an official announcement about the approval of the ETFs the following day. The message misled investors and sent shockwaves through the crypto industry. Prosecutors called the Council’s role a major part of a 'sophisticated fraud scheme.' He used fake IDs, lied at telecommunication stores, and forwarded password reset codes for victims’ accounts to partners both in the US and overseas.
Prosecutors said that because of the Council’s actions, a heavy penalty is necessary. Prosecutors emphasized that such behavior should lead to a prison sentence within the guidelines range. The DOJ also stated that the Council profited from these illegal actions. Legal documents revealed that the fraudulent activity was well-coordinated and had global implications.
As of May 12, the Council’s legal team had not yet responded to the DOJ’s sentencing request. His defense team is expected to argue his case before Judge Jackson on May 16. The DOJ’s request aligns with the severity of the crime and its impact on both the crypto markets and the SEC’s credibility.
Impact on the Crypto Market and Legal Context
The fake Bitcoin ETF approval caused a significant temporary disruption in the market. Bitcoin prices spiked following the false announcement, reflecting misinformation's power in the highly sensitive world of digital assets. However, the SEC acted quickly to counteract the false claims, limiting the damage caused.The ongoing Eric Council Jr. case has legal implications for future crypto-related fraud. While the case is still developing, it signals a robust government response to crimes within the crypto sector. The legal outcomes in Council’s case could influence how the Justice Department approaches similar cases involving digital assets and blockchain technology.
