- L Misthos and S Pettigrove
Emojis speak louder than words (and may be financial advice)
A recent ruling in the United States District Court, Southern District of New York found that the use of emojis could amount to financial advice, and therefore carry legal consequences. Common emojis such as the rocket ship, stock chart and money bag could suggest a financial return on investment, according to the ruling.
The case was brought by an investor claiming that Dapper Labs' popular NBA Top Shot platform involved an unregistered securities offering. The emojis, which included a rocket ship and hands raised in celebration, were allegedly interpreted by the investor as a recommendation to purchase NFTs sold by NBA Top Shots in the hopes the value would rise.
The judge in the case agreed with the investor, stating that emojis posted on Twitter helped to create an expectation of profit:
although the literal word "profit" is not included in any of the Tweets, the "rocket ship" emoji, "stock chart" emoji, and "money bags" emoji objectively mean one thing: a financial return on investment.
Former branch chief of the Securities and Exchange Commission, Lisa Braganca, weighed in to the discussion in a tweet:
Users of these emojis are hereby warned of the legal consequences of their use.
The Court's finding serves as a reminder that seemingly light hearted or informal communications on social media can have serious legal consequences. The finding comprised one aspect of a broader ruling by the judge permitting a class action to proceed against Dapper Labs and its CEO over the sale of Top Shots NFTs on the basis that they may involve the sale of unregistered securities under US securities laws.