Which is precisely why the game currency Bitcoin is going to stay a game currency: that's what it damned well is. Can shake that "formalism" quote all the way to Sunday, this isn't a formal matter in the least. Reasons barring Bitcoin from being a currency in the legal sense are purely functional, quite numerous and absolutely irreconcilable through formalism.
"Game currency" is no defense. First Circuit court has already ruled that virtual shares issues by virtual companies existing only in virtual stock exchange solely for the purported reason of being a game for entertainment to still be investments. Might want to read up on
SEC v. SG, Ltd. The first circuit saw right through the sham of "it is only a game". What matters is the intent of the participants. I think one would find it pretty trivial to convince a jury that the public at large viewed any "asset buying games" as what they are investments. Hell this very sub forum would provide sufficient proof. It is impossible for an objective person to read the securities forum and believe the intent isn't for profit and instead is solely as entertainment in a game.
From SEC vs SG Ltd.
http://studentorgs.law.smu.edu/Science-and-Technology-Law-Review/Articles/Summer-2005/Tippett.aspxSG argued that the virtual shares were part of a fantasy investment game created for the personal entertainment of Internet users, and therefore, those shares do not implicate the federal securities laws. 23 The SEC countered by stating that substance ought to prevail over form, and that merely labeling a website a game should not negate the applicability of the securities laws. 24The district court agreed with the defendant and granted the motion to dismiss, stating, the virtual shares were a clearly marked and defined game, lacking a business context.25 The SEC appealed immediately.26 This appeal hinged on whether the district court erred in ruling that transactions in the privileged companys shares did not constitute transactions in securities as a matter of law. 27 The First Circuit looked to the definition of an investment contract as a security, as defined under the three pronged test set forth by the Supreme Court in Howey. 28After applying the elements of the Howeytest and rejecting the rationale behind the district courts decision, the First Circuit reversed the dismissal order and remanded the case for trial. 29 The district court had created a distinction between commercial dealings and games, finding that the former were covered by federal securities law and the latter were not. The First Circuit rejected such a distinction, noting that as long as the three-pronged Howeytest is satisfied, the instrument must be classified as an investment contract. 30 It is immaterial whether an instrument is labeled as a serious commercial venture or a game, as the securities acts were enacted to encompass virtually any instrument that might be sold as an investment. There is no categorical exception for games.31
As a personal note I disagree with the court's decision in SG for a number of reasons but to pretend that "it's isn't a security because .... game" is just naive and dishonest. It isn't an open and shut case but intent matters. When asset holders are listing real assets, generating real world profits, and passing those as dividends to shareholders, and you have this entire forum dedicated to analyzing various securities, their risks, potential profits, etc it would be pretty hard to convince a jury that this is all a game solely for entertainment. By all accounts SG's operation was more like a casino then a true free market of assets and the courts still ruled against them. If SG Ltd failed in that defense then you honestly think other asset exchanges which have listings more bound to the real world then SG's "companies" which were totally fictional entities not having assets, cashflow, or profits will be more successful. Maybe they will but they will need a defense a lot stronger than "it is a game currency. period.".