When the Securities and Exchange Commission this week issued guidelines for cryptocurrency companies that want to sell digital tokens, many in the industry praised the SEC for new regulatory clarity, but also privately seethed the agency had gone too far.
“This feels like an overt declaration of war on cryptocurrencies,” said a senior lawyer who advises crypto firms. “The guidance is terrible but people say ‘we have to say nice things or they’ll prosecute us.’ Everyone is afraid the SEC is full of thin-skinned bureaucrats, and now they’re so used to groveling.”
The lawyer, who is well known in Washington, DC, asked not to be named for fear of retaliation from the SEC. In an interview with Fortune, he claimed the SEC guidelines fail to acknowledge how crypto tokens—which are nominally for buying online services but are also a vehicle for speculation—are distinct from other assets. He added the SEC’s position will cause smaller companies to set up shop outside…