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If they make claims in their ICO-related documents that the coin is not a security when it is in fact a security, then they are committing securities fraud. You're right that if they straight up said "this is an unregistered securities offering", it would not be fraudulent.

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That would be correct if the law was settled in this area. It is not. Generally you also need to prove intent for fraud, and if the law is not settled, it will be hard to prove fraudulent intent.

One argument here is that the law is settled. If it's securities law that applies, as the SEC has started, then it's been settled for over 80 years.

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