What constitutes fraud, as opposed to just incompetence, is defined by case law. There will still be a gray area where unscrupulous actors stay technically with

What constitutes fraud, as opposed to just incompetence, is defined by case law. There will still be a gray area where unscrupulous actors stay technically within the law, while bilking investors with poorly planned projects that still profit them. The example you gave of algo stablecoins, made famous with Terra/LUNA, is a good one. To some extent, this would have to be dealt with via reputation markets. Assuming it's found that Do Kwon didn't break any laws and is free to create new tokens, one would hope that investors will stay away from those projects, and more generally, projects like Terra Luna that promise to algorithmically maintain a stable value. Perhaps the SEC can help investors without the risks associated with blanket restrictions by publishing guidelines for how to assess token sale offerings, along with red flags to watch out for, and even perhaps a voluntary/opt-in certification program for token sales.