It seems that in practice, yes, most people who are buying into ICOs have an expectation of profits based on the actions/development/promotion of a third party

It seems that in practice, yes, most people who are buying into ICOs have an expectation of profits based on the actions/development/promotion of a third party team running the project. Matt Levine talked about some of the nuances of this back when the SEC released a report about the DAO[1]. A couple days ago, I stumbled across a blog post of the Colony.IO project[2], who are creating a token and blockchain platform for distributed organizational management (coincidentally similar in concept to the DAO). They go into detail about their plans for having an ICO only once they have a product actively functional. The hopes are that with a working product, people buying the tokens will do so with the expectation that it is a sale of services, rather than an investment security. Now, their perspective is that of the team and their lawyers, and not necessarily that of the SEC. But if there is hope that ICOs won't all be securities, I think that is the pathway. [1] https://www.bloomberg.com/view/articles/2017-07-26/tokens-vaults-ties-and-taxes https://www.bloomberg.com/view/articles/2017-07-26/tokens-va... [2] https://blog.colony.io/the-colony-token-sale-7ac14c845bc0 https://blog.colony.io/the-colony-token-sale-7ac14c845bc0