Don't most ICOs explicitly state that the token does entitle the holder to...anything? With a stock or bond, there are legal structures that underlay the promised mechanism by which an investor might get a return on investment.

While it's all nice and fuzzy now, it seems to me that the recipients of the ICOs funds can do as they please with the money.

They are structured this way as an attempt to avoid the securities regulations.

It's an interesting solution to the problem. Securities regulations are setup so that investors have a chance at a return. They are intended to prevent the situation where companies raise funds, and don't return value to the investor.

So the sponsor of the ICO just says, no worries, we're not even promising an effort at returning value to investors!

It's unclear how this is going to play out from a regulatory point of view. It is clear, however, that the chance of these companies generating real value and returning it to the token holders is close to zero.

My guess is that most people putting their money down recognize, at least on some level, that they are joining a ponzi scheme. People love to gamble.