I'm not sure exactly what you are asking about. I was focusing on the distinction on whether a coin would be considered a security or not. As far as I understand it, one could operate in a fraudulent manner (or not) regardless of that distinction. In order to not run afoul of securities law, companies have to either ensure that they are following said laws or avoid dealing in securities.

If you're referring specifically to Colony.io, then I have no idea. I just read their blog post.