Hacker who hijacked SEC Twitter account to boost Bitcoin arrested, faces up to two years in prison for falsely claiming ETF approval

The Federal Bureau of Investigation (FBI) arrested a 25-year-old man from Alabama on Thursday for allegedly participating in the hack of the official Twitter account of the U.S. Securities and Exchange Commission (SEC) in January. The hack led to a brief and drastic surge in the price of Bitcoin, rising over $1,000 after the release of a fake tweet.

SEC Twitter Hacker Eric Council Jr. Arrested, More Than One Suspect Involved

According to the U.S. Department of Justice (DOJ), Eric Council Jr. is facing charges of conspiracy to commit identity theft and device fraud, and is expected to appear in court on Thursday night. The charges indicate that Council was part of a group that conspired to illegally access the SEC's social media accounts and disseminate misleading information that could affect the financial markets.

If convicted of conspiracy to commit identity theft and device fraud, Council could face serious penalties. In particular, aggravated identity theft carries a minimum sentence of two years, and other charges could result in even longer sentences for him.

Impact of January Hack on Bitcoin

The incident took place on January 9, when the SEC's Twitter account was compromised. Hackers posted a fake tweet from the account claiming that the SEC had approved a Bitcoin exchange-traded fund (ETF). The tweet specifically stated, "Today the SEC has approved a Bitcoin ETF to list on all registered national securities exchanges," implying broader legitimacy and adoption of Bitcoin in the financial realm.

The misleading tweet immediately caused a spike in the price of Bitcoin, with the cryptocurrency's value surging by over $1,000 in a short period. At the time, the SEC was indeed considering the approval of a Bitcoin ETF, making the fake tweet appear credible.

Shortly after the false tweet was posted, the SEC regained control of its account and swiftly took action to rectify the situation. The agency issued a statement confirming the tweet was the work of hackers and clarified that no Bitcoin ETF had been approved at that time.

"According to the DOJ, following the release of the corrective statement, the price of Bitcoin dropped by over $2,000."

Following the hack, the SEC did approve a rule change for a Bitcoin ETF, a long-awaited milestone for the cryptocurrency industry. However, this approval was unrelated to the misleading tweet, and the actual market impact was far less dramatic than the price manipulation caused by the hack.

With the rise of digital assets and the increasing role of social media in the financial markets, regulatory and financial institutions are facing increasing pressure to strengthen their cybersecurity measures.