While startups launching initial coin offerings (ICOs) may be all too aware they're working in a legal gray area, that might not be enough to stop lawsuits that could test their legality.

At issue is that, although the U.S. agency tasked with enforcing securities law – the U.S. Securities and Exchange Commission (SEC) – has voiced concerns about cryptocurrency tokens (even labeling one a security), it has yet to announce much in the way of formal rules.

But while the SEC would have bearing on criminal lawsuits, courts hearing civil suits aren't necessarily constrained or dictated by the SEC's lack of a formal position on ICOs. Instead, these courts would make decisions based on their prior rulings and the specific circumstances of a case.

But what would that decision be? That question hinges on another: What makes an ICO a security or something else? Although attempts to interpret existing law have been made, it's unclear even to those in the know.

Now, following the news that Tezos, one of the largest most visible startups yet to use the ICO funding mechanism, has been hit with two lawsuits, it seems lawyers and litigators are lining up to press the issue, potentially with the aim of a payday in mind.

Sara Hanks, CEO of CrowdCheck, a consultancy that assists entrepreneurs and investors with crowdfunding campaigns, told CoinDesk:

And the interest seems to be coming from lawyers working in similar sectors where a mix of lax regulation and bad actors have created the conditions for both suits and abuse.

Jaspar Ward, a partner at Louisville-based Jones Ward, which has filed class actions against fantasy sports services, sought to stress that he sees ICOs as an area of interest for precisely those factors.

"We see this as the next area where consumers could get harmed by some bad actors taking advantage of the lack of oversight or by pushing the envelope," Ward said.

And according to some, Tezos is the prototypical defendant for such a lawsuit.

While the ideas underlying the project itself date back to the earliest days of blockchain (the white paper it's based on has been in progress since 2014), the company has clear ties to the U.S. (which aids lawyers in the collectability of rewarded funds) and has attracted a significant number of buyers to its sale.

Dynamic Ledger Solutions, for instance, is a Delaware-based company that holds Tezos’ intellectual property and the source code for its yet-to-be-developed technology.

"The ICO most appealing to a plaintiff lawyer would be large in terms of total money raised, have a strong U.S. nexus, would have promoters and participants in the ICO who are U.S.-based, and the tokens that it would issue would reflect a claim on the share of the company’s future revenue," explained Joel Fleming of Block & Leviton, adding succinctly:

As chronicled by CoinDesk, the allegations against Tezos include both fraud and the sale of unregistered securities, though it's the latter that may be most notable here.

The idea is that civil lawsuits from disgruntled token holders may force the SEC's hand outlining an official stance on whether ICOs are indeed securities, which in turn, could have ramifications that extend far beyond just Tezos.

In this way, the case against Tezos could set important legal precedents, and in remarks, lawyers surveyed appeared to already be thinking about how to demonstrate that token offerings like those by Tezos could be deemed securities.

According to Jake Walker, also of Block & Leviton, which has launched an investigation of its own into Tezos, proving the sale of unregistered securities pursuant to the 1933 Securities Act is "much more of a 'check the box' litigation" than proving fraud.

He continued, "That kind of flaunting of securities laws is something that definitely stands out to the plaintiff's bar and to us."

While these lawsuits could spur other ICO issuers to rethink their token scheme's structure to shield themselves from liability, Walker believes it may be too little, too late.

"Tezos is far from the only ICO that we see that has substantial U.S. involvement and U.S. entities that would clearly be participants in the sale of unregistered securities and be potentially liable," he said.

Others appeared to agree that this issue could be settled in court, or that at least, the incentives are there for law firms to attack the issue.

David Silver, the partner at SilverMiller in South Florida who filed the second suit yesterday against Tezos, believes his case could serve as a springboard for future ICO litigation.

"This is a leak in a dam that is about to come falling down," he told CoinDesk.

But, the attractiveness of Tezos as a target doesn't mean a judgement against them will necessarily implicate other, similar projects.

"A Delaware company changes everything," said Silver, stressing that, with distributed technologies, proving a tie to a location could prove key for litigators.

Further, because most plaintiffs' lawyers work on a contingency basis, meaning that they are paid a percentage of the judgments they win on behalf of clients, they tend to shy away from cases where recovering funds awarded could be problematic – such as when companies are sheltered overseas.

Since there are more foreign-registered ICOs than U.S-based ones, lawyers might see the opportunity cost as too high and move on to other things.

"It gets significantly more complicated when they are overseas or foreign entities," said Fleming. Plus, "in terms of collectability, it’s a bit more difficult given that most of the ICOs are raising their money not in fiat currency but in bitcoin or ether."

And of course, a class action lawsuit against an ICO requires finding enough dissatisfied token holders who want to pursue legal recourse.

Silver concluded:

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