Union Official’s Grilling of Bitcoin Expert Draws Rebuke from SEC Commissioner

WASHINGTON—Bitcoin’s partisans and foes argue endlessly about the skyrocketing price of the asset and how it should be regulated. The cryptocurrency has even sparked a feud between a senior Wall Street regulator and a top union official.

The spat occurred Thursday at the Securities and Exchange Commission, where Republican SEC Commissioner Michael Piwowar chastised the AFL-CIO’s policy director, Damon Silvers, for how he treated a bitcoin expert who spoke at a recent public meeting. Mr. Silvers aggressively questioned the founder of a blockchain startup at the October meeting of the SEC’s Investor Advisory Committee.

“This committee is not a Hyde Park soapbox for demagoguery and tub thumping,” Mr. Piwowar said at Thursday’s meeting of the advisory group. “Nor is it an inquisitorial star chamber.”

Mr. Silvers, who sits on the advisory committee, quickly returned fire. He asked if Mr. Piwowar meant to address him directly. Mr. Piwowar said he was speaking to the full committee. “I didn’t think you had the courage,” Mr. Silvers said, suggesting that Mr. Piwowar didn’t have the guts to call him out by name.

At the October meeting, Mr. Silvers scolded a committee witness, Adam Ludwin, who spoke about bitcoin and blockchain technology. Mr. Silvers said the bitcoin market has become a speculative bubble and demanded to know why the cryptocurrency is not considered an investment contract that the SEC regulates.

The price of bitcoin has rallied 1,500% so far this year, surging past $16,000 on Thursday, according to research site CoinDesk. Its meteoric rise has attracted crowds of eager small-time investors.

Mr. Silvers said many bitcoin experts “evade” the regulatory questions by reciting complex descriptions of the blockchain technology that underlies the cryptocurrency.

“I don’t want to hear marketing language,” Mr. Silvers said. “I am deeply, deeply frustrated with a conversation that seems to evade the law. … I am not interested in the slightest in parables or technical jargon. I am interested in law, and you have not said a single thing that is legally relevant.”

After Mr. Silvers’s criticism of Mr. Ludwin, the advisory committee’s chairman, Anne Sheehan, cut off the debate.

Mr. Ludwin, whose San Francisco-based company Chain Inc. has raised money from Khosla Ventures and Citigroup Inc., wasn’t immediately available to comment.

Mr. Silvers also sharply criticized a University of Virginia law professor at a June meeting at the SEC. Mr. Silvers said the professor, Paul Mahoney, lacked “courage” and evaded his questions about the impact of deregulatory legislation advanced by the House Financial Services Committee.

“Even you can’t bear to admit that in fact you are pushing a bill that is exactly like the ones that devastated the American public over the last 20 years, and you are knowingly doing so,” Mr. Silvers told Mr. Mahoney. “I just wish you had the courage to say so.”

Mr. Piwowar on Thursday took exception to the accusations that some witnesses faced at those recent meetings.

“Guests spend hours preparing their presentations,” Mr. Piwowar told the committee. “They travel here on their own dime, and on their own time, take our questions, respond to our comments, and sharpen our views. They come to us in good faith.”


Source: WSJ

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