The Utility Token fight is similar in nature, but even broader in effect. By not defining Utility Tokens and exempting them, the SEC can maintain its power and control over the capital formation process within the United States. It can audit the companies that issue Tokens, subpoena them, prosecute them and assess crippling civil and criminal penalties. All for the crime of wanting to pre-sell the software and services these companies want to provide.
What is is the effect of this? Remember, the chief reason Tokens exist is that they lower the cost of capital, thereby making capital available to a broader range of developers. Maintaining the status quo continues to concentrate power in the hands of the capital gatekeepers. In the US, the investment banks are the most threatened by Utility Tokens because issuing a Token sidesteps them. As long as the traditional methods of capital formation have to be observed, they continue to maintain an oligopoly over the access to capital.
The other effect is to drive innovation and development overseas. US companies are faced with a difficult decision. The owners of these companies that I have been privileged to meet have been very patriotic and want to develop in the US. But if the cost of capital is less in another country, that is where they have to go. In a startup phase, there is no room in the budget for the cost of traditional equity financing in the US. The final result of this is the US falling further and further behind in this area.
This is is not an acceptable result.
This is why Wyoming has to get it right. Again. This is why Wyoming has to be first. Again. This is why we have to lead the fight. Again.