Emojis As Financial Advice? Court Kills Rocket, Bag Of Cash In Blow To Fun In Finance

Editor's note: This story has been updated to clarify the court ruling in the Dapper Labs case is on a motion to dismiss, and the lawsuit is ongoing. The story has also been updated with a comment from Dapper Labs. 

Finance can often be seen as dry and unexciting, right?

Twitter and StockTwits users will know that emojis have brought a fun and lighthearted touch to the industry.

But, beware. U.S. District Judge Victor Marrero recently said in a motion ruling that the use of emojis in finance may no longer be just a fun addition; they're a legitimate form of financial advice. Let’s back up.

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What Happened: On Feb. 22, Marrero said in a motion ruling that the use of certain emojis in the context of finance objectively mean one thing: a financial return on investment.

Specifically, the "rocket ship" 🚀 emoji, "stock chart" 📈 emoji, and "money bags" 💰 emoji were deemed to be indicative of an investment opportunity.

While the Securities and Exchange Commission (SEC) hasn’t officially ruled the use of certain emojis are a form of financial advice, Former SEC Branch Chief Lisa Braganca said that “users of these emojis are hereby warned of the legal consequence of their use.”

This ruling came on a motion to dismiss filed by Dapper Labs in a case involving its offering of NBA Top Shot "Moments."

The judge said the way in which Dapper Labs offered its digital collectibles created an investment contract under the Howey test, which defines an investment contract as "a transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party."

The case could have significant implications for the NFT industry, and more specifically, those that offer NFTs alongside a native token.

Dapper Labs created its own blockchain, known as the “Flow Blockchain,” with the native Flow FLOW/USD token as part of a larger so-called Flow Network, which would host applications that run atop and whose transactions are validated on the Flow Blockchain.

The plaintiffs in the case accuse Dapper Labs of “propping up the market for Moments as well as the overall valuation of NBA Top Shot” by not allowing users to withdraw their money in an attempt to draw interest and increase value for its Flow Blockchain and Flow token.

Marrero denied Dapper Labs’ motion to dismiss the lawsuit before trial, meaning the case will proceed.
A spokesperson for Dapper Labs noted the court described the ruling on the motion to dismiss as a close call. 

"It did not conclude the plaintiffs were right, and it is not a final ruling on the merits of the case. Courts have repeatedly found that consumer goods – including art and collectibles like basketball cards – are not securities under federal law. We are confident the same holds true for Moments and other collectibles, digital or otherwise, and look forward to vigorously defending our position in Court as the case continues," the Dapper Labs spokesperson told Benzinga. 

Next: FTX Founder Sam Bankman-Fried Faces New Criminal Charges Alleging Fraud, Illegal Campaign Contributions

Image by Gino Crescoli from Pixabay.