No idea how they would attempt to accomplish such a task (from what I understand, it would be akin to making linux "illegal," probably more difficult). But that wouldn't stop some senator or congressman from using the child pornography/terrorism angle from trying to make a big deal about it (and a name for his or her self) in congress. And then what happens to any attempt to encourage further legitimate adoption?

It would fall under the same stigma that Tor seems to be getting. I run a relay from my PC often, and I had friend over who say Vidalia running on my machine. He looked at me and asked, "what are you doing? looking at kiddie porn or something?" That's the rep it has, at least with some folks. I don't know the very long term goals of the project, but I know that growth is essential to the Bitcoin project. If people recoil, laugh, or assume you're a terrorist when you mention Bitcoin, then we will have a problem.

I have no idea what the power of the SEC would be in this matter, but I'm sure there is some government acronym that has the power to declare all Bitcoin commerce illegal. No legitimate business or non-profit can use bitcoins to transfer funds. Then what? \

I guess all I'm saying is that bad press is bad press, especially when it's fear mongering, bullshit press.