"We've seen quite a few upsets where guys can't actually race because they're so afraid of going over the red line or doing something wrong."
Van Velthooven said it was making a mockery of the sport. "It's numbing the sprinting scene. People come here to see excitement and they're taking away that excitement because us riders can't actually do anything exciting."
The sprinter looked to have claimed New Zealand's sixth medal of the championships when he finished behind British legend Sir Chris Hoy and his German training partner Max Levy. It was the first time he had raced Hoy and was awed by his inside-outside move on the last lap.
"He's a knight. He's won it a few years now. I sort of expected a knight to do that. It's the first time I've seen him race - I'm just surprised he didn't have a joust," he joked.
Van Velthooven has been in great form in Melbourne, winning bronze in the kilo time trial and following that up with the keirin.
Sprint coach Justin Grace agreed that the commissaires in Melbourne had been super-strict, but noted that van Velthooven was philosophical upon getting the bad news. "He said he has bigger fish to fry later in the year," Grace said.
Chris Hoy, too, was unhappy, again criticising officials for lowering the standard of the Olympics by reducing the Games programme to one rider per country per event.
He won the individual sprint bronze medal in Melbourne but could miss out on the chance to defend his Olympic title at his home Games in London because of the rule.
Teammate Jason Kenny beat the four-time Olympic gold medallist in the semifinals on Saturday night and went on to claim the silver and the edge in their intense battle for Britain's berth in the event.
Ten riders from five countries went under 10s for the flying 200m in the remarkably quick qualifying round of what Hoy described as probably the greatest sprint competition ever.
But five of them - two Frenchmen, an Australian, a German and a Briton - will miss out on the event in London, while much slower riders from weaker countries will get a berth.
Hoy said the world championships were a higher standard than the Olympics will be and medals won in Melbourne over the past five days would be harder to earn than those in London.
"I've said it before, I think it's a mistake when you look at the quality of the field here," Hoy said on Saturday night.
"Today and yesterday, in terms of strength and depth and the quality of the field and the closeness of the racing, it was probably the best ever sprint competition.
"It's a shame that you've got, of the riders who made the last eight, four [who] won't be at the Olympic Games. And of the top 10 qualifiers, five athletes won't be at the Olympics."
The riders who finished third, sixth, seventh and eighth at the world titles will most likely not be able to compete in the sprint at the Olympics.
Hoy said the rule, imposed by cycling's governing body the UCI at the behest of the International Olympic Committee, would not work in a sport like athletics.
"You've got to imagine the 100m final in the athletics with one Jamaican, one American," he said.
"I believe the best athletes in the world should be there, whatever country they're from.
Whether it's four guys who make the last four from the same country or whether it's athletes from different countries."
Hoy and Kenny took the gold and silver in the sprint at the 2008 Olympics, but whoever misses the individual event in London, will still be part of Britain's three-man team sprint.
- additional reporting: AAP