This is basically correct. If the thing you're buying gives you a claim on the future profits of an organization, it is probably a security under US law.

If the thing you are buying has only its intrinsic value, then it is a commodity.

An example would be a baseball card (intrinsic value only) vs. a card that entitled you to some fraction of that baseball player's future income over the course of their career. The latter isn't really something that exists, although it probably could, but if it existed it would probably be some type of security.

If I’m understanding this correctly, a big difference is the potential for the value to fluctuate in relation to fiat. All of these examples are measured in denominations of US dollars. But, if these tokens are viewed as products rather than currency, therein lies another question. Is there a way to reach a conclusion on that?

Maybe I am just being pedantic, but it seems most tokens could make an argument that they are products just by the fact that they build a brand and may have a technology that differentiates them from others. I have little hands-on financial experience but the terms of abstraction by which we define what a currency consists of seems like a philosophical topic to me. I am curious how this gets resolved.

It seems cryptocurrency may offer the puzzle piece which illustrates this spectrum of abstraction to a degree which is truly painful. A year ago, I had no idea what a security is, and after reading about them for a year, I am doubting that they exist as a logically defined objective category. Like many things in finance, the concept of these securities appears to be a relative conjurement, dependent not on logical definitions but on contextual gaps of unimaginable forms of abstraction. As cryptocurrency implements the unimaginable, those gaps are filling. We will eventually face a continuum of abstraction limited to philosophies of material.

I tried to read the linked release, got about 1/5 of the way down it and was just incredibly bored. I hate to sound so lazy and will try to read it again later.