While there are some interesting points in the article, there seem to be errors.
Though the 5th Circuit Court opinion you cited used the word "money" IMO, this word was used to mean
Money - not
Legal Tender Your argument suggests that you've equated the two terms. Historically, anything from grain, to gold, to banknotes, to fiat banknotes, and beyond has served as "money" Therefore, anything of value that one might invest might qualify under
1. Investment of Money towards a 2. Common Enterprise which 3. Depends on the Efforts of Others and likely remains in full force as the standard test for the matter pending further Supreme Court rulings.
true, IANAL, and don't have an extensive law library to search case law for the definition of "money" bit AFAICT, that is a very vague term, not necessarily defined legally, whereas there are much more explicit, well defined terms that could be used if the Court's desire was to limit the scope of the definition of money, and thus the scope of the opinion.
Furthermore,
III.3. While it is true that some people spend money or other capital to acquire such in-game currency, it is not true that :
a) Any authority exists which could issue Bitcoins, promise to issue Bitcoins, or make any representations as to Bitcoins whatsoever ;
b) Any state, government or organisation issues Bitcoins or could conceivably issue Bitcoins either as legal tender, for the payment of taxable income, as a currency of account or to be used in local or international trade.
Because of these reasons it can not be said that anyone holds any title in either law or equity to any Bitcoin. Since there is no first owner of the Bitcoin that could then pass title as part of a contract, all purported Bitcoin “purchases” are contracts for no consideration and as such legally without merit.
A contract (in the US) is considered valid if there is an offer, acceptance of the offer, and consideration paid for the offer. There is no requirement in the UCC for that consideration to be made in "money" - just value transferred in consideration for the offer. It, therefore, only need be established that bitcoin has value in order for it to be accepted as consideration for an offer.
That you make the above argument, that a contract with consideration paid in bitcoin is invalid, because bitcoin doesn't qualify as consideration is problematic. It would seem that MPEx has made offers, and accepted bitcoin as payment of consideration by the acceptor(s) of those offers. This cannot go both ways. Either the contracts you've presented are invalid, or a contract with consideration paid in bitcoin is valid. IMO, I'd rather your argument break down here than your contracts
So, while bitcoin may not actually "care" about the SEC, and may be able to be used to circumvent legal restrictions in any jurisdiction, primarily by obfuscating issuer identities, that doesn't actually mean that the SEC is outside of its (self proclaimed) jurisdiction of "all companies that serve US citizens and deal in or with securities of any sort".
The one part of the argument which may have some merit is the establishment of "ownership" or "legal title to" a/some bitcoin. If one could establish that no one can own, or posess, or have title to, an amount of bitcoin, then it could indeed fail the test for valid consideration payment. However, I believe that one can establish that one has irrefutable control over, and therefore, what is tantamount to ownership of, bitcoin.
It remains to be tested whether or not the ability to sign a message with an address, or to send a specified payment to a specified address is enough to establish "ownership" or "title" or and other sort of legal control that may be necessary for it to be valid consideration paid for an offer made.
But, I'll have to go back to - The Offeror requested consideration in bitcoin, the Acceptor paid consideration in bitcoin, and the bitcoin paid as consideration was accepted, and the goods or services were delivered by the Offeror. After the goods are delivered, unless there is some move made by the Acceptor to forcibly withdraw the consideration, and the Offeror has accepted, and redeemed in some way, the consideration - the contract is in force. The longer that the Offeror fails to seek remedy after the goods or services are delivered, the more the validity of the consideration is established.
If bitcoin were to be found to be "illegal" itself - then there might be another argument to invalidate any contract based on it as consideration - provisions in contracts that are illegal are generally not upheld in court - if that is the consideration itself, it would stand to reason the contract would be null and void. (if I replace "bitcoin" with "heroin" the contract will not be enforced by any court in the US
)
But, all in all.....BTC doesn't care about the SEC. MPEx rules.
It's my opinion that the failures on Wall St. over the last several years have shown that business has grown beyond the government's ability to regulate (ah, here, it certainly is mostly the other way 'round...business regulates government) In the cases where the government fails in its sworn duty to protect its citizens, then the citizens must protect themselves. You may laugh, especially given the GLBSE and other securities scandals in bitcoin, but, it takes time for people to learn, and for the needs to be assessed, and tools developed to support that need for the people to protect themselves.
MPEx currently is the some of best protection we have from overzealous governments who would quash innovation like bitcoin, and more specifically, utilizing the Bitcoin network and bitcoin derived technologies to improve things like transparency in public financial reporting, and reduce opportunities for fraud. Again, with as much fraud as we've seen, this may seem laughable now, but as I look through proposals like
this, on decentralized bond markets I'm encouraged that in the long term, we can achieve those goals.
With as much fraud, and crime as we've seen on Wall St, I'm quite sure we need to achieve those goals.
One last thing. While I might pass the test for "sophisticated investor" - I'm sure as hell not going to pass most of the "accredited investor" tests necessary to invest in certain kinds of instruments. This is one of my primary reasons for investing via bitcoin instead of vi USD in traditional markets. With small sums of money, there are extremely limited opportunities in the traditional marketplace. I don't think that it's the governments job to protect me so much that I am unable to participate in the market, and unable to earn. I've had some pretty significant (to me) losses, due to negligence, fraud, and outright theft, but these were risks I clearly understood, and accepted. I invested no more than I can afford to lose. Even with my losses, I've done better than I could with a job in the small town I live in, and that, IMO, is not something the government should be in the business of stopping....there are no jobs in the small town I live in, and that's a significant problem for the government.
So. For all you government employees reading this: take that back to the bosses. Bitcoin is young, and a few scandals like these recent one will necessitate improved processes that protect investors much more than any law will ever be able to - becoming overly involved will crush that innovation, which will, in the end, greatly assist you (if you're still needed, and if you're not needed, provide you new, more exciting and lucrative opportunities!) [/rant]
To wit:
Distributed Bonds, Colored Coins, Atomic Coin Swapping, Contracts, SmartProperty, and Software Agents] - This would literally diminish the potential scope of any regulatory body. Though one could attempt to police & prosecute human actors in this model, it wouldn't be possible to prevent issuance or exchange of securities, of really any sort. 
