It didn’t take long for Scott Nelson to realize he was only non-lawyer in the conference room.

There amidst attorneys from various government agencies, including the SEC, the CEO of blockchain startup Sweetbridge and long-time logistics tech specialist was prepared to discuss his company’s forthcoming initial coin offering (ICO). The lawyers on his team had tried to persuade him not to go.

It was an audacious move seeing that the SEC has recently begun dozens of investigations into various stakeholders involved in the sale and marketing of ICOs as part of an effort to better understand when such products meet definitions laid out in U.S. securities law.

Nonetheless, Nelson waved off his lawyers advice, instead asking the SEC to meet him face-to-face.

And according to Nelson, that was the right move.

“I have always felt that the best thing to do was to talk to people,” Nelson told CoinDesk in an exclusive interview. “I didn’t think a lawyer would be able to well represent what we’d like to do.”

And what Sweetbridge would like to do is launch two crypto tokens – one representing an asset-backed stablecoin and another that provides access to discounts on a protocol so that token holders can get better terms on their loans in an effort to unlock capital held in assets in a supply chain.

But Sweetbridge has been worried that regulators in the U.S. might impose rules that would classify the tokens as securities (a characterization Sweetbridge objects to), thus pushing the startup out of the market.

For many ICO-financed firms, the SEC’s recent actions have largely made them surrender on the idea that new crypto tokens created and sold to investors could be considered “utility tokens,” a term denoting a digital commodity meant to represent digitally unique data on a blockchain protocol.

That said, Nelson went to the SEC in the hopes of changing that narrative and displaying why tokens that are not categorized as securities are needed to make certain blockchain business models work.

And while the regulators didn’t render a verdict on the company’s plan, Nelson came away with a positive view of what the SEC and other regulators are trying to do as they get their heads around a market that has exploded over the past year.

In particular, Nelson got the impression from comments made during the meeting that the SEC was frustrated about the lack of ICO executives that were willing to sit down and discuss their business.

He said:

“I think this is a case where the American use of lawyers — and overdependence on them, I think — is probably hurting the industry.”

An open SEC

The reason this could be hurting the industry, according to Nelson, is that the SEC wants to hear not just the legal justification of crypto tokens, but about specific business models.

“I was super pleased that the meeting started with a request not to talk about tokens and the law but to just explain the business case,” Nelson said.

He went on to laud the SEC for its ability to ask smart questions – the sorts of things he thought exhibited thoughtful interest in what his company was trying to do.

While Sweetbridge wants to start enabling liquidity for crypto assets, its aspirations are bigger, in that one day they hope to allow a trucking company that wants to install a gas-saving platooning system in its vehicles to be able to borrow against the value of the fleet itself to pay for those upgrades. The users of the platform, both individuals and businesses, will be lending money to themselves through the use of the stablecoin, as Sweetbridge explains it.

Overall, Nelson’s firm wants to create an ecosystem of companies who transact on its protocol – lenders, borrowers, servicers and more.

It’s a new way of thinking about supply chain financing, but according to Nelson, those at the SEC had already considered the possibility. For example, when the issue of reporting came up, Nelson said there were comments in the room that acknowledged the protocol itself might be able to do the reporting, which wasn’t something he expected to hear.

Nelson told CoinDesk:

“I found their questions unusually lucid and intelligent”

As such, Nelson believes the SEC is not only more knowledgeable about the space than some in the crypto community think, but are also far more open to crypto tokens than what many initially presumed.

The SEC declined to comment on this story.

Send the CEOs

Still, Sweetbridge was unable to get a formal decision on how the SEC would view its upcoming token sale.

But, that’s not to say nothing could come out of the talks. Specifically, Nelson now hopes to obtain a “no action letter,” a commitment from the SEC that it won’t come after a company because it doesn’t see anything objectionable in its business plan.

“They have to go back and circulate ideas internally,” Nelson said. “I would expect they’ll come back with more questions.”

Sweetbridge, though, believes its essential to offer its token without registering it as security, so as to not exclude a lot of small businesses from using its token to better access capital. Yet, if the SEC does categorize Sweetbridge’s token as a security, the company plans merely to cut off potential users based in the U.S.

And Nelson made that last part clear during the meeting. Although Nelson believes that’s not what the SEC wants.

“They keep saying its facts and circumstances. They have to be looking for a set of facts and circumstances where they can say: ‘This is all right, [because] if they just shut it down, I think they realize the U.S. is going to be disadvantaged,'” he said.

Meanwhile, Nelson believes it would help if more ICO issuers went to talk to regulators about their business models.

“I know there’s this group of lawyers who have been trying to meet with and lobby the SEC. How come it’s not the CEOs of projects? What do the lawyers know? We are the actual developers of the technology, the practitioners,” he said, adding:

“Why do we have to go through these intermediaries when we’re all about not having intermediaries?”

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