Investment contracts typically involve a transaction where funds are invested in a scheme or venture with the expectation of earning a return. These contracts legally bind the parties involved, and they often contain terms outlining how the investment will be managed, what returns to expect, and the rights and obligations of each party. In the context of cryptocurrencies and blockchain, the classification of certain tokens or coins as investment contracts can lead to regulatory scrutiny under securities laws, which require registration with regulatory bodies if they meet certain criteria.