Not to pick you apart, but I think you are incorrect about almost all of this.
First of all, I am not so sure that Will presented the options clearly and concisely.
Will’s analysis draws an incorrect legal conclusion that “LLC membership interests are typically investment contracts”. The analysis depends on the facts. I actually spent only five minutes googling (i admit it was not a westlaw “good law check” but still…) I was able to find a 10th circuit case stating llc membership interests were not an investment contract. So I am confident there is case law out there, and even if I am not an expert on said case law, I can confidently say Will’s cut and dry analysis paints an inaccurate picture and draws an erroneous conclusion.
This thing about the SEC lacking jurisdiction/justification - you may be aware but there is a lot of jockeying taking place, in particular between the OFTC (who you recently saw weigh in on the OOkiDAO nonsense) and the SEC (who has been flexing for a hot minute) in a land grab for the jurisdiction you are talking about. Eventually in the US we should see legislative clarity, but for now it has been a regulatory free for all, and both agencies are elbowing up to the table (along with treasury and others). By the way - when CityDAO decided to launch as a Wyoming LLC, it availed itself of the laws of the United States including, if deemed applicable, those SEC laws. So the claim they do not have jurisdiction is flat out incorrect. (Caveat that I am referring to personal jurisdiction and you may be referring to subject matter jurisdiction, in which case, arguably they the SEC does NOT have subject matter jurisdiction over CityDAO - this has certainly been CityDAO’s position to date!)
The SEC’s power does not come from issuers “desire to trade”, rather it comes from the securities acts of 1934 as clarified by case law/other law in the time since. One of their areas of purview is over the control of who may trade on the platforms you referred to. You are correct, people who use the exchanges must play by the rules, but they do not always play by the rules, and that is where the SEC can flex and say you did something wrong with penalties - which they hope to set at a level to adequately disincentivize bad actor behavior. Sounds like a bad outcome for anyone. The primary underlying public policy justification for the SEC and its area of law is the provision of truthful information to providers of capital in exchange for the caveat emptor of profit seeking behavior ( the old risk and reward, baby!). For example, the accredited investor requirement is ostensibly created to basically ensure that poor people cant be taken advantage of by investment creators/promoters with get rich quick schemes. Some argue its just another way that wealth is perpetuated in this capital driven system but we can leave the political philosophy aside for now.
Last - many scholars are wondering what the post-merge ethereum world means for that project’s argument that it is not a security. The merge seems to have concentrated the power into the hands of a few key stakers, and thus seems to cut against the notion that it is “decentralized” for purposes of its “management”. Allegedly Gary Gensler (ahem Mr Burns from the Simpsons) is hot to trot for ethereum. We may find out sooner than later that you are wrong about that as well.
If CityDAO wants to pursue profits as a business model, something that I have never heard formalized, then it would require some changes.