Federal prosecutors reportedly plan to propose a plea deal to the man who allegedly hacked the U.S. Securities and Exchange Commission’s (SEC) social media platform X account earlier this year.
The Department of Justice (DOJ) says Alabama native Eric Council Jr., 25, allegedly conspired with others to take unauthorized control of the SEC’s X account and prematurely announced the approval of spot Bitcoin (BTC) exchange-traded funds (ETF) in the US.
At a hearing on Friday, he pled not guilty to conspiracy to commit aggravated identity theft and access device fraud, but federal prosecutors also told the judge they planned to offer a plea deal to Council, which could involve cooperation against his unnamed co-conspirators who were alleged to be the masterminds behind the scene, Bloomberg reports.
The fake ETF announcement, posted in January, caused the price of Bitcoin to increase by more than $1,000 and then drop by more than $2,000 after the SEC regained control of its X account and declared the statement to be unauthorized and the result of a security breach. The regulator legitimately greenlit spot Bitcoin ETFs soon after the security incident.
The DOJ alleges Council carried out the hack through an unauthorized SIM swap, which involves fraudulently persuading a cellphone carrier to reassign another person’s contact number to a SIM card controlled by a bad actor. The Alabama man allegedly used the stolen identity of a person who had access to the SEC’s X account.
X said after the hack that the regulator failed to set up multi-factor authentication (MFA) for its profile, despite the fact that SEC Chair Gary Gensler publicly encouraged investors last year to secure their financial accounts with that very feature.
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