[Kadin]

This is the (literal) textbook definition of a security:

    any note, stock, treasury stock, security future, bond, debenture,
    evidence of indebtedness, certificate of interest or participation in
    any profit-sharing agreement, collateral-trust certificate,
    preorganization certificate or subscription, transferable share,
    investment contract, voting-trust certificate, certificate of deposit
    for a security, fractional undivided interest in oil, gas, or other
    mineral rights, any put, call, straddle, option, or privilege on any
    security (including a certificate of deposit) or on any group or index
    of securities (including any interest therein or based on the value
    thereof), or any put, call, straddle, option, or privilege entered into
    on a national securities exchange relating to foreign currency, or, in
    general, any interest or instrument commonly known as a “security,” or
    any certificate of interest or participation in, temporary or interim
    certificate for, receipt for, guarantee of, or warrant or right to
    subscribe to or purchase, any of the foregoing. [1]

It's a somewhat circular definition, but my reading is that basically, anything whatsoever that gives you an ownership interest or claim on the future profits of an enterprise can be construed as a security. You can track who owns the shares of the enterprise via entries in a central ledger (the current method for most stock companies), use paper bearer certificates (traditional way), use a distributed ledger, hand out carved pieces of pottery, whatever. If it functions even remotely like a security, it's probably a security.

EDIT: The Supreme Court's "Howey Test" [2], which came out of a 1946 case over complex real-estate leaseback deals, is in some respects a simpler method to determine whether something may be a investment contract, which is a security:

  1. It is an investment of money    
  2. There is an expectation of profits from the investment   
  3. The investment of money is in a common enterprise   
  4. Any profit comes from the efforts of a promoter or third party

The Howey Test is reliable in the sense that anything satisfying those four points is extremely likely to be an investment contract and thus a security, but I believe there are probably securities that fail one or more aspects of the test but are still regulated, due to the broad statutory definition of "security" under the 1934 and 1940 Acts.

[1] That's from the Investment Company Act of 1940, which seems to be definitional; there are some other definitions used elsewhere in the UCC and other Federal laws (largely from 1934), but they seem to be similar, and quite a few places punt to this definition. (Quoted in http://apps.americanbar.org/buslaw/newsletter/0014/materials... which is an annoyingly "locked" PDF that you will need to de-DRM; this is left as an exercise to the reader.)

[2] http://consumer.findlaw.com/securities-law/what-is-the-howey...

[Jd]

Here's the earliest legal work on this stuff which will probably interest you:

https://coincenter.org/entry/reporting-back-from-the-blockch...

[sillysaurus3]

Mobile friendly. (Mostly because I'm on mobile and no way am I going to swipe back and forth 40 times to read this):

any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. [1]

[elmar]

> 1. It is an investment of money 2. There is an expectation of profits from the investment 3. The investment of money is in a common enterprise 4. Any profit comes from the efforts of a promoter or third party

------------

Using the "Howey Test" on Bitcoin you find that Bitcoin and almost all other cryptocurrencies should be considered securities.

  1. It is an investment of money 

yes, electricity and hardware are equivalent to money

  2. There is an expectation of profits from the investment  

yes

  3. The investment of money is in a common enterprise   

yes

  4. Any profit comes from the efforts of a promoter or third party.

yes, from Satoshi the original promoter and all subsequent miners.

[randomsearch]

Fails on (2). The only reason you expect to profit is you think (without rationale) that the value of the coins will increase. That’s pure speculation.

[Frogolocalypse]

You fail on number one I'm afraid, and go down from there. 1. By that rationale, buying baseball cards is buying a security. Maybe if you were the ISSUER of the cards, you'd have a point. But even then, it's tenuous. Maybe if they were selling pre-release cards? 2. So baseball card buyers are buying securities? 3. Where is this supposed bitcoin enterprise? 4. Where can I buy these coins from satoshi?

[elmar]

Using the "Howey Test" even CryptoKitties should be regulated by the SEC!

[freeone3000]

The IRS considers them securities for capital gains. I'd be surprised if the SEC saw it differently.