A decide on Friday sentenced an Alabama man to 14 months in jail for his function within the January 2024 hack of the Securities and Exchange Commission’s X account, which was used to ship out a tweet that briefly spiked the worth of bitcoin by greater than $1,000, the Justice Department mentioned.
The person, Eric Council Jr., pleaded responsible three months in the past in U.S. District Courtroom in Washington, D.C., to conspiracy to commit aggravated identification theft and entry gadget fraud in reference to serving to others who took management of the SEC’s account.
The X account was used to falsely declare that the SEC had formally accredited exchange-traded funds for bitcoin.
The cryptocurrency’s value rose after that tweet, however then fell by greater than $2,000 after the SEC shortly regained management of the account and mentioned the tweet was false.
Surveillance footage displaying Eric Council Jr. in a Huntsville, Alabama, AT&T retailer posing as an worker of the U.S. Securities and Trade Fee.
Courtesy: U.S. District Courtroom, Washington, D.C.
Mockingly, the SEC mentioned the subsequent day that it had accredited rule adjustments that allowed the creation of bitcoin ETFs.
The 14-month sentence that Council obtained in D.C. federal courtroom was 10 months lower than what was requested by prosecutors, who in a sentencing memorandum this week mentioned {that a} group that gives instruments for hackers in February posted on X a video statement “purportedly made by the Defendant.”
Within the video, the 26-old Huntsville resident Council “acknowledged his function within the hack and referenced his discussions with regulation enforcement and responsible plea as steps in the direction of accountability, he blamed the SEC’s cybersecurity practices, claiming, ‘[t]he @SECGov Hack was an inside job’ and ‘the SEC nonetheless hasn’t taken full accountability for investor losses as a consequence of cyber safety practices of a lonely 85- year-old with dementia,’ ” prosecutors wrote.
“Defendant ends the video with a message the place he continued to decrease his and his conspirators’ culpability.
The animated video, depicting characters dancing, concludes by saying: “However on the finish of the day, the one motive their monetary regulatory company bought hacked was due to a university drop out that majored in Cyber Safety and violently smoked plenty of weed.”
Council’s protection lawyer, Dwight Crawley, in a sentencing memo, requested a jail time period of 12 months and a day for his consumer, noting that he has no prior prison historical past.
“The defendant admitted to utilizing marijuana every day previous to his arrest, however he has not had any drug or alcohol infractions since his launch on pre-trial supervision,” Crawley wrote.
“In keeping with the defendant, his marijuana use aided him along with his psychological well being struggles.”
Crawley declined to touch upon Council’s case when contacted by CNBC on Friday. The lawyer hung up when requested in regards to the video cited by prosecutors.
Council’s function within the hack conspiracy concerned executing a so-called SIM swap assault on an individual whose telephone quantity was linked to the SEC’s X account.
Council was tipped to the identification of that individual by a member of the conspiracy after which used a conveyable ID automobile printer to print out that individual’s driver’s license, courtroom information state. He then used the ID at an AT&T retailer in Huntsville to get an worker there to reassign the sufferer’s cellphone quantity to a phone managed by Council, information mentioned.
After having access to the sufferer’s telephone quantity, “Council’s co-conspirators then accessed the account and posted within the identify of the SEC Chairman,” the Justice Division beforehand mentioned.
On the time of the bogus tweet, the bitcoin market was awaiting information of a call on bitcoin ETFs.
Council, who was recognized on-line by the handles “Ronin,” “Easymunny,” and “AGiantSchnauzer,” was paid in about $50,000 value of bitcoin by co-conspirators for his function within the hack.
Prosecutors of their sentencing memo mentioned that surveillance brokers noticed Council on June 12 making an attempt to execute a SIM swap at an Apple retailer in Birmingham, Alabama.
On Jan. 18, “regulation enforcement executed a search warrant of Defendant’s vehicle and the Alabama residence the place he was residing” and recovered a pretend identification card within the identify of sufferer [in the SEC hack] with Defendant’s picture and a conveyable identification printer,” the memo mentioned.
“Legislation enforcement’s search of Defendant’s laptop computer uncovered templates for pretend identification playing cards and web searches for ‘SECGOV hack,’ ‘telegram sim swap,’ ‘how can I do know for certain if I’m being investigated by the FBI’ and ‘how lengthy does it take to delete telegram account,’ ” the memo mentioned.
“Schemes of this nature threaten the well being and integrity of our market system,” District of Columbia U.S. Lawyer Jeanine Pirro mentioned in a press release.
“SIM swap schemes threaten the monetary safety of common residents, monetary establishments, and authorities businesses,” Pirro mentioned.