In a May 12 court filing, U.S. prosecutors asked Judge Amy Berman Jackson to sentence 25-year-old Eric Council Jr. to two years in prison for the January 2024 hack of the Securities and Exchange Commission’s X account, calling his actions a “sophisticated fraud scheme.” Council’s defence team has counter-filed, urging the court to cap any custodial term at one year and a day. The hearing is set for 16 May in Washington, D.C.
Prosecutors set out their case
The government says Council obtained fake identity documents, posed as a mobile-phone customer and performed a SIM-swap to seize a handset linked to an SEC staffer. With control of the staffer’s number he intercepted a password-reset code, handed the credentials to co-conspirators and helped publish a bogus post proclaiming that spot Bitcoin exchange-traded funds (ETFs) had been approved. Bitcoin’s price jumped within minutes before retreating when then-SEC chair Gary Gensler clarified the message was unauthorised. Prosecutors told the court the market disruption and the elaborate preparations warrant a sentence within federal guidelines.
Guilty plea and potential penalties
Council pleaded guilty in February to one count of conspiring to commit aggravated identity theft and access-device fraud. The charge carries a statutory maximum of five years, but prosecutors say 24 months strikes the right balance between deterrence and proportionality. Defence lawyers argue their client earned only about US$50,000 and has accepted responsibility, asking for a sentence just above the 12-month threshold that would allow supervised release.
The hack that rattled markets
The false ETF post landed on 9 January 2024, one day before the SEC’s actual approval, and sent trading desks scrambling. The episode amplified criticism of the regulator’s own security practices even as it finalised oversight of the first spot-Bitcoin funds.
Enforcement in transition
Council’s case arrives amid a broader reshuffle at the Justice Department. President Donald Trump has installed interim U.S. attorneys in New York and Washington without Senate confirmation, including former SEC chair Jay Clayton in the Southern District of New York and broadcaster Jeanine Pirro in the District of Columbia. How the new leadership will approach crypto crime remains uncertain, though recent sentences, such as the 12-year term handed to Celsius founder Alex Mashinsky on 8 May, suggest white-collar cases remain a priority.
What happens next
If Judge Jackson accepts the government’s recommendation, Council would serve roughly the same custodial stretch handed to SIM-swappers who targeted large U.S. companies last year. Should the defence prevail, the one-year-and-a-day term would make him eligible for release after around ten months with good behaviour. Either way, the case underscores the rising criminal penalties for market-moving social-media intrusions at a time when crypto markets and regulators, remain acutely sensitive to sudden tweets.