Federal prosecutors are reportedly planning to present a plea deal to the individual accused of hacking into the U.S. Securities and Exchange Commission’s (SEC) social media platform, known as X. The Department of Justice (DOJ) claims that Eric Council Jr., a 25-year-old from Alabama, conspired with others to gain unauthorized control of the SEC’s X account and prematurely announced the approval of spot Bitcoin exchange-traded funds (ETF) in the United States.
During a hearing on Friday, Council pleaded not guilty to charges of conspiracy to commit aggravated identity theft and access device fraud. However, federal prosecutors informed the judge that they intend to offer Council a plea deal, which could potentially involve his cooperation in identifying his co-conspirators, who are believed to be the masterminds behind the incident.
The false ETF announcement, which was posted in January, caused the price of Bitcoin to surge by over $1,000 before plummeting by more than $2,000 after the SEC regained control of its X account and confirmed that the statement was unauthorized and the result of a security breach. Following the incident, the regulator approved spot Bitcoin ETFs in a legitimate manner.
According to the DOJ, Council executed the hack by performing an unauthorized SIM swap, a fraudulent technique that involves convincing a cellphone carrier to transfer another person’s contact number to a SIM card controlled by the hacker. It is alleged that Council used the stolen identity of an individual who had access to the SEC’s X account.
X, in response to the hack, criticized the regulator for failing to implement multi-factor authentication (MFA) for its profile. This is despite SEC Chair Gary Gensler publicly urging investors to secure their financial accounts with this feature.
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