It’s not just an eggplant that could get your company in trouble.
Emojis are a common and valid form of modern expression, but like any other form of speech, companies need strict policies and procedures around their use. Don’t believe that? Ask the SEC about rocket ship and money bags emojis. Theta Lake’s Susannah Hammond breaks down a recent NFT-related court ruling and what it means for companies across all industries.
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 NFTs without filing the required registration statement with the SEC.
In a recent court filing, a judge ruled that the use of emojis in a tweet by NBA Top Shot to promote an NFT amounted to an investment contract despite the tweet never using the word “profit.” 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 “profit” was not used in any of the tweets, emojis representing a rocket ship, stock chart and money bags all mean one thing — the expectation of a financial return on investment.