Federal Charges Against Eric Council Jr.
The federal government is urging a judge to impose a two-year prison term on Eric Council Jr. for his involvement in disseminating a deceptive announcement that misled the public about the approval of Bitcoin exchange-traded funds (ETFs) by the SEC.
Details of the Case
In a court filing dated May 12, prosecutors in the District of Columbia proposed that Judge Amy Berman Jackson sentence Council to the length they believe is warranted given the circumstances of his actions. Council, who gained unauthorized access to the SEC’s account on the social media platform X, falsely claimed on January 4, 2024, that the SEC had sanctioned spot Bitcoin ETFs—just a day before the regulator officially announced such approvals.
This misleading post caused significant fluctuations in the market and led to Council’s arrest shortly thereafter.
Prosecution’s Arguments
Prosecutors elaborated on the nature of the fraudulent scheme, indicating that it involved a well-orchestrated plan where false identification was utilized, and misleading information was presented at telecommunications outlets. Additionally, they asserted that Council helped pass along password reset codes for the online accounts of victims to accomplices both domestically and internationally.
The prosecution emphasized, “This case deserves a guidelines range prison sentence,” and stressed the need for a substantial penalty reflecting the sophisticated nature of the wrongdoing.
Court Proceedings
As of the stated date, Council’s attorneys had not yet responded to the prosecution’s sentencing proposal, with his court date remaining set for May 16. Previously, he admitted guilt for his participation in a SIM swap attack that enabled him and his accomplices to take control of the SEC’s X account.
The false announcement led to Bitcoin’s price experiencing a significant increase, exceeding $1,000, before the SEC quickly retracted the post and confirmed the ETF approvals the next day.
Context and Impact
Meanwhile, there are ongoing considerations regarding how recent changes in the leadership of the Department of Justice, particularly following appointments made by former President Donald Trump, might impact upcoming digital asset cases. Notably, a judge recently sentenced former CEO of Celsius, Alex Mashinsky, to 12 years in prison after he pleaded guilty in a separate related case.
The interplay between the Justice Department’s approach to cryptocurrency cases and the political context within which it operates remains an area of scrutiny.
