Public companies have strict auditing rules, and other controls that prevent insiders, or a small group of people colluding with insiders from ripping off other investors.

This is not the case with private firms, and doubly-so for ICOs.

There's risky investments, and there's walking around the bad part of town after dark, wearing a blindfold, with two wallets in each hand, hoping you'll find a winning lottery ticket on the ground.

The regulations are more about regulating the ability to make money off of naive investors, in my view. You should be able to offer the ability to make risky investments to people, but there should be enforcement mechanisms to ensure you're not misleading people.