An Alabama man was sentenced on Friday to 14 months in prison for hacking the Securities and Exchange Commission’s X account and passing control to someone who used it to falsely claim the agency had approved spot Bitcoin ETFs.

Eric Council, 26, pleaded guilty in February to conspiracy to commit identity theft. The identity in question belonged to an SEC employee called “C.L.” in court documents, who had access to the agency’s X account.

Council admitted to posing as CL in order to take control of their phone number and, in turn, the SEC’s X account.

Using the account, Council’s unnamed partners announced in January 2024 the SEC had finally confirmed spot Bitcoin ETFs.

Investors had long anticipated the approval, and the price of Bitcoin jumped about 2% immediately after the post was published. Bitcoin then fell 6% after it was revealed the post was fraudulent.

“The SEC’s @SECGov X/Twitter account has been compromised,” a spokesperson told DL News at the time. “The unauthorised tweet regarding bitcoin ETFs was not made by the SEC or its staff.”

The SEC approved 11 spot Bitcoin ETFs less than 24 hours later. Nevertheless, the hack was considered a shocking breach of the US’ top financial regulator.

According to court documents, Council ran an identity theft operation out of a home in the Alabama town of Athens, population 25,000.

He gained access to the SEC’s X account on behalf of unnamed co-conspirators, who paid him $50,000 in Bitcoin “and other virtual currencies,” according to court documents.

On January 9, 20204, Council used a fake driver’s license featuring his own face and CL’s name to convince an AT&T employee in Huntsville, Alabama, to transfer CL’s phone number to a new SIM card.

Using that phone number, Council began receiving messages meant for CL — including one featuring a password reset code for the SEC’s X account, which he sent to his partners.

They used that code to gain access to the X account and published a post that would whipsaw crypto markets.

“Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges,” the SEC said on X.

In October, federal agents arrested Council at his home in Athens, Alabama.

“Council and his co-conspirators used sophisticated cyber means to compromise the SEC’s X account and posted a false announcement that distorted important financial markets,” Matthew Galeotti, the head of the Justice Department’s criminal division, said in a statement.

“Prosecuting those who seek to enrich themselves by threatening the integrity of digital assets through fraud is critical to protecting U.S. interests.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.