Federal prosecutors are preparing a plea deal for Eric Council Jr., the Alabama man charged in the January hack of the SEC’s X account.
At a recent hearing, Council, aged 25, pleaded not guilty to charges of aggravated identity theft and access device fraud. Authorities accuse him of posting the infamous false tweet about the SEC approving Bitcoin ETFs.
FBI Focuses On Finding the Brains Behind SEC X Hack
According to Bloomberg reports, prosecutors think Council’s cooperation could be crucial in identifying additional suspects who allegedly orchestrated the scheme. The plot involved stealing the personal details of an SEC employee to breach the agency’s account.
Assistant US Attorney Kevin Rosenberg notified the US District Judge Amy Berman Jackson about the potential plea. However, the prosecutor is not yet assured that Council will accept the deal.
Prosecutors claim Council forged an ID and tricked a phone store employee into giving him access to the SEC employee’s phone, allowing his alleged co-conspirators to exploit security gaps on X.
Read more: Who Is Gary Gensler? Everything To Know About the SEC Chairman
Despite Council’s not-guilty plea, the Federal government states it has substantial evidence linking Council to the crime. The indictment shows Council frequently searched online for information about the hack and checked if he was under investigation.
Council’s false tweet led to an immediate $230 million liquidation in the market, as investors reacted to the misinformation before the actual approval of Bitcoin ETFs.
This potential plea offer is a common strategy used by government prosecutors. In fact, the FBI often encourages hackers to cooperate in exchange for reduced sentences, as seen in the Bitfinex case.
Last week, federal prosecutors recommended a five-year sentence for 2016 Bitfinex hacker Ilya Lichtenstein, who avoided a harsher sentence by providing significant assistance to authorities.
Read more: Everything You Need To Know About Ripple vs SEC
Meanwhile, the SEC continues to struggle in its regulatory fight against Ripple. Earlier this week, a new filing showed that Ripple is seeking to dismantle the SEC’s stance that XRP qualifies as an unregistered security. Ripple’s move adds new pressure on the SEC, marking another critical phase in this high-stakes courtroom clash.
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