A 25-year-old Alabama man has admitted to his role in the hacking of the U.S. Securities and Exchange Commission’s (SEC) X account. The cyberattack led to a false announcement about Bitcoin exchange-traded funds (ETFs), causing a brief price surge.
Eric Council Jr Pleads Guilty in US SEC X Account Hack
According to a Bloomberg report, an Alabama man Eric Council Jr. has pleaded guilty to charges related to the January 2024 SEC Bitcoin ETF hack. The case was heard in a Washington federal court, where Council admitted to conspiracy to commit aggravated identity theft and access device fraud.
The hack involved posting a fake announcement on the SEC’s X account, formerly Twitter, falsely stating that the agency had approved Bitcoin ETFs. The post caused Bitcoin’s price to rise sharply before the SEC clarified that the information was false. The official approval of the ETFs came a day later.
Prosecutors revealed that Eric Council Jr used a fake ID to deceive a phone store employee into granting access to the victim’s phone. This method, known as a SIM swap attack, allowed the hackers to bypass security measures and take control of the SEC’s social media account.
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Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
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Bitcoin is not a useful tool for money launderers and here’s proof. 38-years-old Larry Dean Harmon admitted to being the operator of Helix, a Bitcoin Mixer service that operated on the Darknet. According to the US Department of Justice, “Harmon advertised Helix to customers on the Darknet to conceal transactions from law enforcement.” What was this man thinking?
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The press release continues:
Harmon admitted that Helix partnered with several Darknet markets, including AlphaBay, Evolution, Cloud 9 and others, to provide bitcoin money laundering services for market customers. In total, Helix moved over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets. Harmon further admitted that he conspired with Darknet vendors and marketplace administrators to launder such bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.
The blockchain sees it all and registers every transaction forever. A mixer, also known as a tumbler, is a service that seeks to anonymize transactions. They pool together funds from several parties, mix them up, and serve supposedly clean coins to everyone involved. At the very least, the coins can’t be traced to a specific address. For that, they charge a fee.
BTC price chart for 08/19/2021 on Currency.com | Source: BTC/USD on TradingView.com
Even Helix Didn’t Know How Much It Was Laundering. And Bitcoin Is Money
Betraying everything that’s sacred, Larry Dean Harmon’s defense was that he wasn’t guilty because Bitcoin is not money. The law went on the record and confirmed what Bitcoiners have been saying for years, the Washington Post reports:
A line of reasoning rejected by Chief U.S. District Judge Beryl A. Howell.“ ‘Money,’ ” she wrote, “commonly means a medium of exchange, method of payment, or store of value. Bitcoin is these things.”
That’s on the record. The law knows that Bitcoin is money.
In any case, one thing about mixers is that there are no humans involved in the process. The system does it all. In Helix’s case, apparently, no one even knew how much money they were laundering. Bitcoin.com quotes Harmon’s defense attorney Charles Flood:
“One interesting thing about this case is there was a double-blind system Harmon had set up with Helix,” Flood said in the federal courtroom on Wednesday. “While he completely acknowledges that he violated the law and was in fact laundering money and knew it was drug proceeds … he does not know the exact amount laundered,” Flood added.
What Will The Law Do With Larry Dean Harmon?
For the punishment, we quote once again the original press release:
As part of his plea, Harmon also agreed to the forfeiture of more than 4,400 bitcoin, valued at more than $200 million at today’s prices, and other seized properties that were involved in the money laundering conspiracy. Harmon will be sentenced at a date to be determined and faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, a term of supervised release of not more than three years, and mandatory restitution.
Ouch.
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This all leads to our original statement, Bitcoin is not a useful tool for money launderers. Or for criminals in general. To drive the point home, the Wall Street Journal quotes Ari Redbord. He’s “a former assistant U.S. attorney for the District of Columbia and a former senior adviser at Treasury,” and says:
The guilty plea shows U.S. law enforcement is pursuing cryptocurrency mixers with connections to the Darknet and illicit activities, while the transparency of blockchain enables them to trace the funds.
“The nature of cryptocurrency is to allow law enforcement to have unique visibility on financial flow where they never had before.”
And that’s another thing Bitcoiners have been saying all along.
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