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Regulatory Perspectives

Blog: When Posting an Emoji is a Securities Violation

By April 11, 2023April 13th, 2023No Comments

When is a rocket ship not a rocket ship? When it is cited in a legal case alleging a firm and its control person violated U.S. securities laws by offering for sale to the public certain non-fungible tokens (“NFTs”) without filing the required registration statement with the Securities and Exchange Commission (the “SEC”).

The use of emojis was specifically called out as meaning there was an expectation of profit for the NFT issuance, which was then deemed to be an investment contract (*known as the Howey Test).  Although the literal word “profit” was not used in any of the organization’s Tweets, the “rocket ship” emoji, “stock chart” emoji, and “money bags” emoji were included and, objectively, mean one thing: a financial return on investment.

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