As I understand it, there doesn’t need to be a liquid market for something in order for it to be a security; just an investment of capital with the expectation of return through the efforts of a third party (the Howey test)

Startup stock is a security, despite trade restrictions (e.g. right of first refusal). Same with restricted (i.e. unvested) stock units.

> is Lend a security?

According to Coinbase, the SEC said "they consider Lend to involve a security." Not that it is a security. The second question is (a) more ambiguous and (b) a red herring from Coinbase.

If Coinbase is taking deposits from customers to engage in securities trading, it's acting as a bank or broker-dealer. It is registered and regulated as neither. Note that Kraken and Gemini have state banking charters. Coinbase is drawing a false equivalence. The entire enterprise stinks of bad faith, possibly fraud.

Everyone in the cryptocurrency industry is familiar with the Howey test.