It boils down if you are willing to accept that stupid people are going to pay for their stupidity (on very real and life-altering consequences) or if they should be shielded from it.

Personally I belong to the side where I'm willing to give up some personal freedoms for a better collective life, that includes saving very stupid people from very stupid decisions that might affect the rest of their lives (and their families').

Regulation is only on the surface about investor protection. The main driver is usually taxation (only what's regulated can be taxed). If these investment schemes become too liquid allowing anyone to invest in anything in large sums, tax evasion and tax fraud become even harder for authorities to track (especially since there's no legal framework for ICOs - and creating those takes time). As many others have pointed out, there's no legislation that will hold you back investing in the companies behind these ICOs in one way or another. Just talk to the founders, ask them to sell you some shares and you're good to go. But then there's a well established track record when you buy and transfer shares (for example in the books of the company that sold you the shares). The same is not (yet) true for ICOs.

This is an excellent argument that the crime of fraud does not exist.

you assume that 1) most people are rational and 2) irrational behaviors of others costs you and everyone else nothing (in dollars or utility).