What makes a crypto asset a security in the US?

economictimes.indiatimes.com:

What is the SEC alleging? The Securities and Exchange Commission (SEC) sued Coinbase on Tuesday in Manhattan federal court and accused the largest US cryptocurrency platform of operating illegally by evading disclosure requirements. The SEC said Coinbase allowed users to trade at least 13 crypto assets that should have been registered as securities, including tokens such as Solana, Cardano and Polygon.

The regulator is seeking financial penalties and wants a judge to order Coinbase to follow US securities law. While others, including the European Union, have started to craft regulation for the crypto industry, the US has led a regulatory crackdown.

The SEC has brought more than a hundred enforcement actions in the past decade, claiming various cryptocurrencies are securities. But the Coinbase case will be the biggest test yet for the regulator's jurisdiction over the industry.

The regulator this week also sued Binance, claiming the world's largest crypto exchange engaged in «an elaborate scheme to evade US federal securities laws.» Coinbase has denied listing any securities. Binance has called the case disappointing and said it plans to defend against the claims.

Coinbase and other industry players have been adamant that most cryptocurrencies — which operate on a database shared across a network of computers, known as a blockchain — do not fit the definition of securities under US law. They have also called for new regulation or laws, saying the SEC has been vague and inconsistent in determining whether digital assets are securities and unhelpful to market participants seeking guidance.What is a 'security' under US law? To argue that crypto assets are securities, the SEC has relied on a US Supreme Court case from 1946.