> your token gives the holder some special ability.

It's that category that the SEC appears uninterested in. Some ICOs (like Brave's) are tokens that entitle you to goods or services on the platform in the future. These are effectively currency scrip (or "gift cards" in the article's terminology), and the SEC seems to consider them outside its jurisdiction.

Anyone ever play clash of clans? ICOs that don't confer any securities-type value on the buyer (no ownership stake, entitlement to a share future profits, etc.) are basically just gems from clash of clans. You buy them in order to interact with the service, that's it.

I suppose the only functional difference between ICOs and gems from clash of clans is that you can resell your tokens on a secondary market because of the decentralized nature of the system. But so what?? It's a solution to a problem that never existed.

Either the tokens can be expected appreciate in value or not.

If not, why buy them now?

If yes, doesn't that trigger the Howey test?

Why do people fund projects on KickStarter or pre-order the latest iPhone? Sometimes people really want something and expect future scarcity, even if there's no chance of price appreciation.

The interesting thing about ICOs in this category is that there's a potential secondary market, so if there turns out to be significant scarcity, the price may rise, but if not, it's worthless (other than for its intrinsic value). But this isn't all that different from GMail invites circa 2004.