Alabama Man Receives 14-Month Prison Sentence in SEC Bitcoin Fraud Case
A judge on Friday sentenced an Alabama man to 14 months in prison for his role in the January 2024 hack of the Securities and Exchange Commission’s X account, which was used to send out a tweet that briefly spiked the price of bitcoin by more than $1,000, the Justice Department said. The man, Eric Council Jr., pleaded guilty three months ago in U.S. District Court in Washington, D.C., to conspiracy to commit aggravated identity theft and access device fraud related to assisting others who took control of the SEC’s account. The X account was used to falsely claim that the SEC had officially approved exchange-traded funds for bitcoin. The cryptocurrency’s price rose following that tweet but then fell by more than $2,000 after the SEC quickly regained control of the account and stated the tweet was false.
Surveillance footage showed Eric Council Jr. in a Huntsville, Alabama, AT&T store impersonating an employee of the U.S. Securities and Exchange Commission. Courtesy: U.S. District Court, Washington, D.C. Ironically, the SEC announced the next day that it had approved rule changes allowing the creation of bitcoin ETFs. The 14-month sentence that Council received in D.C. federal court was 10 months less than what prosecutors had requested. They noted in a sentencing memo that a group providing tools for hackers had recently posted on X a video statement allegedly made by the defendant.
In the video, the 26-year-old Huntsville resident Council “acknowledged his role in the hack and referenced his discussions with law enforcement and guilty plea as steps towards accountability. He blamed the SEC’s cybersecurity practices, claiming, ‘[t]he @SECGov Hack was an inside job’ and ‘the SEC still hasn’t taken full accountability for investor losses due to cybersecurity practices of a lonely 85-year-old with dementia,'” prosecutors wrote. “The defendant ends the video with a message where he continued to diminish his and his conspirators’ culpability.”
The animated video, featuring characters dancing, concluded with the remark: “But at the end of the day, the only reason their financial regulatory agency got hacked was because of a college dropout that majored in Cyber Security and violently smoked a lot of weed.” Council’s defense lawyer, Dwight Crawley, in a sentencing memo, requested a prison term of 12 months and a day, noting that his client had no prior criminal history. “The defendant admitted to using marijuana daily prior to his arrest, but he has not had any drug or alcohol infractions since his release on pre-trial supervision,” Crawley wrote. “According to the defendant, his marijuana use aided him with his mental health struggles.” Crawley declined to comment on Council’s case when contacted for additional information.
Council’s involvement in the hack conspiracy included executing a SIM swap attack on a person whose phone number was linked to the SEC’s X account. Council was alerted to the identity of that person by a member of the conspiracy and then used a portable ID card printer to produce that individual’s driver’s license, according to court records. He then used the ID at an AT&T store in Huntsville to persuade an employee to reassign the victim’s cell phone number to a phone controlled by Council.
After gaining access to the victim’s phone number, “Council’s co-conspirators then accessed the account and posted in the name of the SEC Chairman,” the Justice Department previously stated. At the time of the fraudulent tweet, the bitcoin market was awaiting news of a decision on bitcoin ETFs. Council, who was known online by the handles “Ronin,” “Easymunny,” and “AGiantSchnauzer,” was compensated with approximately $50,000 worth of bitcoin by his co-conspirators for his role in the hack.
Prosecutors noted in their sentencing memo that surveillance agents observed Council on June 12 attempting to execute a SIM swap at an Apple store in Birmingham, Alabama. On Jan. 18, “law enforcement executed a search warrant of the Defendant’s vehicle and the Alabama residence where he was living” and recovered a fake identification card in the name of the victim from the SEC hack, featuring the Defendant’s image and a portable identification printer. “Law enforcement’s search of Defendant’s laptop uncovered templates for fake identification cards and internet searches for ‘SECGOV hack,’ ‘telegram sim swap,’ ‘how can I know for sure if I am being investigated by the FBI,’ and ‘how long does it take to delete telegram account,'” the memo detailed.
Schemes of this nature threaten the integrity of our market system,” stated District of Columbia U.S. Attorney Jeanine Pirro. “SIM swap schemes jeopardize the financial security of average citizens, financial institutions, and government agencies,” Pirro concluded.
