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by Mike Caswell

Ontario's Troy Hogg and Florida's James Goldberg, two men charged by the U.S. Securities and Exchange Commission for a cryptocurrency pump-and-dump, have asked that the judge throw the case out. They say that the SEC has no jurisdiction, as regulating virtual currencies is not part of the SEC's mandate. As the men see things, the SEC has improperly targeted them and has created needless uncertainty for cryptocurrency investors.

The request from the men comes as part of a case in which the SEC cited them for a pump-and-dump involving a cryptocurrency called DIG, or Dignity. The SEC claimed that the men ran a scheme in which they issued tokens supposedly backed by $10-billion in gold bullion. (All figures are in U.S. dollars.) As the men issued news about the gold, they unloaded $45-million worth of tokens on investors, the SEC said.

With the case yet to go to trial, Mr. Hogg and Mr. Goldberg have asked that the charges be dismissed. In a motion filed on Jan. 12, 2023, they say that the case is one in which the SEC has ventured beyond its authority. As they see things, Congress has not done anything to give the SEC power over the digital currency market. The digital tokens that they sold have none of the characteristics of a security, they contend.

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