So, we've all had our fun scoffing at regulators, but now that we've got that out of our system (and our portfolio's are down 60%) are we ready to make a regulated US exchange?
No. If you want regulated US stuff check out the dollar, it might be more up your alley.
This would have the perks of inviting more liquidity from larger market participants, as well as more stability and predictability.
Playing around with other experiments such as decentralized exchanges and colored coins just invites unpredictable illiquidity and instability.
The Securities and Exchange Commissions offers plenty of regulatory exemptions for the kinds/sizes of companies that have so far "IPO'd" in bitcoin land, the exchanges might have a more uphill battle but its time to cross the bridge
Like many people posting about this stuff lately, you seem a bit confused as to what the problem is, and what solutions exist.
Have a read.
You've found the main problems but you're not offering the solution.
A decentralized exchange is neutral and will not solve the main problems.
The problem is a problem of trust. Investors cannot trust issuers and issuers have to be audited which means there will be centralization in the form of a concentration of trusted nodes or entities. Trusted entities in the community will have to audit issuers to make sure they aren't a scam like Labcoin.
Mastercoin is a great technology but it lacks the ability to create an environment where investors can trust anything on the decentralized exchange. It's decentralized but untrusted which means technologically it might work but practically it will fail until there is enough trust between investors and issuers that scams and fraud is brought under control.
The SEC cannot solve the problem. Laws cannot solve this problem. It has to be solved technologically, and it means some layer of centralization will be required to have trust.
Even if a virtual auditing service or a distributed auditing corporation has to form there has to be something to certify the issuer as trusted enough that people can buy and sell shares and know it's not a complete scam.
For instance say a company forms on Mastercoin offering a currency backed by Gold called Goldcoin. People have to know without a doubt that this company really has Gold in a vault somewhere otherwise their Goldcoins are a scam and people will lose their real coins for their speculation on the scam. So for this reason there has to be centralization even atop the Mastercoin protocol.
Then after all of that you're going to have to deal with accusations of stolen coins, disputes, and accusations of money laundering. How do we deal with these problems? Ignoring the technical problem doesn't work if we want a legitimate investment platform just like following the law doesn't work if we want a legitimate technological platform.
The law doesn't regulate this space, but the technology doesn't either and that is the problem. We need technological regulation for a global currency because there is no nation in charge of Bitcoin and no uniform set of laws. The people who write the code are going to have to do a better job dealing with scams and fraud.
