Emojis have appeared in courtrooms before, they’ve implicated people or were used to determine intent in criminal cases. This time, they made an appearance in a lawsuit against an NFT company where the judge ruled that they were used as investment advice.
Former Securities and Exchange Commission (SEC) branch chief Lisa Braganca referred to this ruling on Thursday when she warned people of “the legal consequence” of the use of certain emojis.
In the case against Vancouver-based blockchain developer Dapper Labs and its CEO Roham Gharegozlou, plaintiffs accused the company of violating securities laws by “offering for sale to the public certain non-fungible tokens (NFTs) known as NBA Top Shot Moments without filing a registration statement with the SEC.” The plaintiffs alleged that they promoted NFTs as investment opportunities, which Dapper Labs denied, filing a motion to dismiss the complaint.
Judge Victor Marrero denied the motion and ruled that the rocket ship, stock chart, and money bag emojis used to promote the NFTs could be classified as investment advice and that they meant “a financial return on investment.”
This ruling, as Braganca warns, sets a precedent in the emoji-loving crypto community, and could be seen as another step toward reining in the wildly unregulated industry.
Information for this briefing was found via Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
