If you read the provided description of the term IPVO, it makes clear that this is not attempt to do what Burnside is doing. His use of "virtual" is in a context of a "game" in his text. This is not a game, it is virtual-currency-fueled finance. The difference here is that, from a legal standpoint, the IPVO, while similar in ways to an IPO, is quite different.
To date, the bitcoin securities market has attempted to use the term IPO creatively by redefining it to suit its needs, but the term IPO, is meant to imply more than simply selling your company publicly. "IPO" is an accepted term that implies an offering that will be made public on traditional stock exchanges at Wall St and the like, which is obviously not the case here.
Being that most bitcoin IP(V)Os are things like fundraising, crowdfunding, profit-shares, informal entities, and partially unregulated, a unique term must be adopted to differentiate so as not to confuse those familiar with traditional IPOs.
As Danny mentions, there is trailblazing happening here. Both of our legal teams are hard at work establishing ourselves as best as possible within the current framework of guidance. As I have mentioned before, there will be more news on these developments soon, and there will be even more changes to come.
I do hope it works out, it will be great for bitcoin if this venture can succeed. Thanks for your response, but it addresses why I was curious to hear your opinion on the question, it doesn't answer the actual question...
The virtual entity is to ensure current American SEC regulations are not being broken by investors from America.
Why are you sure that calling it virtual will definitely exempt you from all SEC regulations?
...which as other have commented, appears to not be the case. Cryptocyprus has also avoided the question, even though several people have now raised it.
If it this IPVO wasn't for a financial service I wouldn't be pushing this, but they want to start
a bitcoin bank! What other important legal or regulatory things do they believe are ensured that aren't? It's something of a red flag, especially when it's probably only a matter of time before the wrong civil servants in some place or another start looking for excuses to close them down.