Douglas Jackson, chairman and founder of digital cash enterprise e-gold, has mounted a spirited defence against an indictment charging e-gold Ltd., Gold & Silver Reserve, Inc., and the directors of both companies with money laundering, operating an unlicensed money transmitter business, and conspiracies to commit both offences.

Jackson, speaking on behalf of his fellow directors, vigorously denies the charges, taking particular – and convincing - exception to the allegations that either company ever turned a blind eye to payments for child pornography or for the sale of stolen identity and credit card information. His statement is posted on the e-gold Website here.

Libertarians suggest that the Secret Service investigation into e-gold is motivated less by the possibility that the system is being abused by fraudsters, than because of the competitive threat posed by gold and other precious metals to the US Government’s own monetary currency.

Grand conspiracies aside, there other questionable issues raised by the US government's prosecution of this particular case.

In his statement, Jackson points out that search warrants issued by the law courts have resulted in the government helping itself to the financial records of hundreds of thousands of American citizens [plus citizens of virtually every other country] who had not been accused of any wrongdoing.

The threat to individual privacy and civil liberties is worth raising, since it seems unlikely that any scammers using e-gold would generously create a clean audit trail by managing their accounts under their own bona fides.

But the most troubling aspect of the affair is the implicit allegation on which the whole case hangs, in that because e-gold has been abused by scammers, the directors must be knowingly guilty of serious wrong-doing.

If this is the crux of the case against e-gold I suggest the Secret Service indicts every bank executive in America, since no bank, anywhere in the world, can convincingly argue that each and every one of its deposit accounts, without exception, is free from the taint of criminal activity.