US lawmakers urge top crypto ATM operators to tackle fraud

Eric Council Jr., the SIM swap hacker who helped compromise the Securities and Exchange Commission’s X account last year, made $50,000 performing similar attacks and even searched how to tell if the FBI is investigating him, recent filings show.The recent filing was part of the prosecutor’s request to sentence him to two years in prison over his role in the hack, which saw the SEC X account publish a false announcement that a spot Bitcoin exchange-traded fund was approved, shaking up the markets. Council searched: “How can I know for sure if I am being investigated by the FBI” and “How long does it take to delete Telegram account,” US prosecutors discovered following a search warrant of his house, car and devices last June, according to a May 12 court filing.While Council’s Telegram chats were set up to be removed after two weeks, US prosecutors still found chats of Council discussing SIM swaps with others believed to be located overseas.Council also admitted to law enforcement that he received around $50,000 for performing SIM swaps for clients between January to June 2024. He advertised himself as a SIM swapping expert on Telegram under the username easymunny, offering services for payment between $1,200 and $1,500.How Eric Council Jr. pulled the hack off, then got caughtCouncil executed the SIM swap by creating fake identity documents to specifically impersonate someone that his co-conspirators identified as having access to the SEC’s X account.These fake documents were then used to trick a staff worker at telecommunications firm AT&T into reassigning the victim’s phone number to Council’s SIM card. Council inside an AT&T Store on Jan. 9, 2024. Source: US GovernmentCouncil had to share the last four digits of the victim’s Social Security number and driver’s license to effectuate the SIM swap.He then bought a new iPhone from an Alabama Apple store, inserted the new SIM and shared the access codes to the SEC’s X account with his co-conspirators, who later posted the fake news about the spot Bitcoin ETFs on Jan. 9. The Bitcoin products received official approval the following day.Council received payment for the SEC SIM swap in Bitcoin (BTC) and other cryptocurrencies, the prosecutors said.However, Council’s luck ran out on June 12, 2024, when surveillance agents observed him attempting to execute a SIM swap at an Apple store, impersonating another victim.Law enforcement executed a search warrant six days later and recovered several pieces of circumstantial evidence, including templates for fake identification cards on his laptop.Two fake ID documents recovered from Council’s Telegram account. Source: US GovernmentHe pleaded guilty on Feb. 10, after a federal grand jury returned an indictment charging him with Conspiracy to Commit Aggravated Identity Theft and Access Device Fraud last October.Related: SEC Chair: Blockchain ‘holds promise’ of new kinds of market activityThe fake post accumulated over 1 million views before the SEC confirmed it had been hacked roughly 15 minutes later.The two announcements resulted in Bitcoin’s price initially rising $1,000 before abruptly falling nearly $2,000 shortly after, wiping out tens of millions of dollars worth of market positions.The security team at X confirmed that the SEC didn’t have two-factor authentication installed on its X account at the time of the incident. The SEC claimed it initially had 2FA enabled but was erroneously removed by X Support following a request by an SEC staff member.Magazine: Japanese porn star’s coin red flags, Alibaba-linked L2 runs at 100K TPS

Blockchain technology could enable “a broad swath of novel use cases for securities” and foster “new kinds of market activities that many of the Commission’s legacy rules and regulations do not contemplate today,” Securities and Exchange Commission (SEC) Chairman Paul Atkins said.During his keynote address at the Commission’s May 12 roundtable on tokenization and digital assets, Atkins welcomed “a new day at the SEC,” adding that “policymaking will no longer result from ad hoc enforcement actions. Instead, the Commission will utilize its existing rulemaking, interpretive, and exemptive authorities to set fit-for-purpose standards for market participants.”Source: U.S. Securities and Exchange CommissionA key priority will be to “develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law.”In particular, Atkins said the SEC would focus on establishing “clear and sensible guidelines” for crypto assets that could be considered securities. Another area of focus would be to allow brokers to offer a broader range of investment products on their platforms, which in some cases may mix securities and non-securities.Atkins’ approach moves away from former SEC Chair Gary Gensler’s, whose tenure was criticized by some industry participants for its “regulation by enforcement” method of oversight.Securities evolutionAtkins likened the tokenization of securities to the evolution of audio formats — from vinyl to cassettes to digital software — highlighting how each shift enhanced compatibility and interoperability across a wide range of devices and applications. This progression eventually gave rise to streaming content business models, which he said “greatly benefited consumers and the American economy.”SEC’s Crypto Task Force Roundtable on May 12. Source: SECSecurities tokenization is an ongoing topic at the intersection of traditional finance and crypto. Some asset management firms, like BlackRock and Franklin Templeton, have already jumped into tokenization through their respective BUIDL and BENJI tokenized US treasury funds. Robinhood is considering building a blockchain to allow European retail investors to trade tokenized US securities.Tokenized securities may attract interest from firms and brokerages due to features such as faster settlement times, reduced reliance on traditional financial infrastructure, and improved accessibility. Tokenization may also help provide liquidity to asset classes that have historically been illiquid.According to RWA.xyz, $22.6 billion of real-world assets are onchain, a 7.6% rise in the past 30 days. That doesn’t include stablecoins, which are often backed by real-world assets like treasury bills. Stablecoins have a $243 billion market capitalization as of May 12, according to data from DefiLlama. Tether’s USDt (USDT) alone has a market cap of $150.6 billion.Magazine: SEC’s U-turn on crypto leaves key questions unanswered

The US government has asked a federal judge to impose a two-year sentence for Eric Council Jr., the individual who helped post a fake message announcing the approval of Bitcoin exchange-traded funds through the Securities and Exchange Commission’s (SEC’s) X account.In a May 12 filing in the US District Court for the District of Columbia, prosecutors recommended Judge Amy Berman Jackson sentence Council to two years in prison for his role in posting a message to the social media platform X suggesting that the SEC had approved spot Bitcoin (BTC) exchange-traded funds (ETFs) for the first time in January 2024. The fake announcement, which shook markets in the roughly 24 hours before the regulator actually approved spot Bitcoin ETFs, led to the arrest of Council.“This case deserves a guidelines range prison sentence,” said US prosecutors. “Defendant profited through a sophisticated fraud scheme involving fraudulently produced identification documents, a series of misrepresentations at telecommunication stores, and the transmission of password reset codes for victim online accounts to co-conspirators located in the United States and abroad. This conduct deserves a significant penalty.”US government’s May 12 sentencing recommendation for Eric Council. Source: PACERAs of May 12, Council’s legal team had not filed a response to the sentencing recommendation. He is scheduled to appear before Judge Jackson on May 16.Related: Ledger secures Discord after hacker bot tried to steal seed phrasesCouncil pleaded guilty to being part of a group that took control of the SEC’s X account through a SIM swap attack. With control of the regulator’s social media account, the hackers posted a fake message announcing the approval of spot Bitcoin ETFs. The SEC quickly removed the message and announced official approval of the crypto investment vehicles the following day.Many in the crypto industry had been anticipating whether the SEC would approve or disapprove of listing spot BTC investment vehicles on US exchanges when the fake X post appeared. The price of Bitcoin surged by more than $1,000 before then-SEC Chair Gary Gensler refuted the false post’s claims.DOJ leadership change-up under TrumpThe Council case and others will be decided under US Attorney picks who have not received confirmation in the Senate. President Donald Trump appointed interim leadership for the Eastern District of New York, the Southern District of New York, and the District of Columbia after facing pushback from Democrats.It’s unclear how the president’s influence could affect the Justice Department pursuing criminal cases involving digital assets, given his ties to the industry and his own crypto holdings. In New York’s Southern District, a judge ordered former Celsius CEO Alex Mashinsky to 12 years in prison after a December 2024 guilty plea. Magazine: SEC’s U-turn on crypto leaves key questions unanswered