An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others."
https://www.investopedia.com/terms/h/howey-test.asp
If the words sound like that, careful.
1: Some of the deals are "Someone built this thing which is now out of their control. But this thing can be used with these tokes. Want some?".
2: Some of the deals are "I built this thing which is now out of my control. But this thing can be used with these tokes. Want some?".
3: Some of the deals are "I built this thing which is now kinda out of my control. I might be able to change it later, but only if the community stays behind me. Anyhow, this thing can be used with these tokes. Want some?".
The SEC argues that many tokens fall into category 3 and that 3 is close enough to a security that the SEC should have a say in this.
Sounds like SBF talking about "the box" on the Odd Lots podcast..
“Hey just buy this thing from me, and trust me that I will do something great with your money and eventually return it to you, I promise!”
Well, surprisingly there is a looong history of people exploiting a system like this to scam people. We learned, we have to regulate that kind of thing.