Ezra Reguerra
A judge from the United States District Court of the Southern District of New York ruled that emojis like the rocket ship, stock chart and money bags mean "a financial return on investment," according to a recent court filing.
In a tweet, former United States Securities and Exchange Commission (SEC) branch chief Lisa Braganca warned users of the potential legal consequence of their use of such emojis that may indicate future gains. She tweeted:
A federal court judge ruled that these emojis objectively mean "one thing: a financial return on investment." Users of these emojis are hereby warned of the legal consequence of their use. #emojis #rocketshipemoji #DapperLabs — Former SEC Branch Chief Lisa Braganca (@LisaBraganca) February 23, 2023
Braganca shared the link to a court filing where federal court judge Victor Marrero denied Dapper Labs’ motion to dismiss the amended complaint alleging that its NBA Top Shot Moments violated security laws.
Within the filing, the judge pointed out that some of the tweets published by the NBA Top Shot account on Twitter contain emojis that indicate financial returns. “And 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,” they wrote.
Members of the crypto community reacted to the warning and tweeted various responses. One Twitter user described the news as “tragic,” while another pointed out that freedom of speech does not extend to emojis anymore. Meanwhile, a user decided to make a declaration on the meanings of their use of the emojis.
On Feb. 23, lawyers also reacted to the judge’s decision of allowing the lawsuit against Dapper Labs to play out. U.S. attorney Jake Chervinsky pointed out that "it would be absurd" for a US court to consider assets on private blockchains as securities. Chervinsky explained that this can potentially turn every major video game developer, ticketing platform and travel rewards program into an SEC-regulated company.
In a similar manner, the manner in which the SEC went after Terra also captured the attention of lawyers. On Feb. 17, crypto lawyers went on Twitter to voice their thoughts on the issue of the SEC alleging that Terra sold a suite of crypto asset securities. Web3 lawyer Mike Selig explained that under the theory, anything can be a security, while attorney Justin Browder described the SEC’s actions as “wild.”
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Turner Wright
Bankrupt crypto firm FTX’s subsidiary in Japan has reported that thousands of users have moved from the exchange since it resumed withdrawals on Feb. 21.
In a Feb. 22 announcement, FTX Japan said users of the exchange and those at Liquid Global had withdrawn roughly 6.6 billion yen — $50 million at the time of publication — in cryptocurrency and fiat. According to the crypto firm, 7,026 account holders had moved funds from FTX Japan to Liquid and there were 5,697 transactions involving cryptocurrencies and 1,947 instances of users withdrawing fiat.
The crypto firm said on Feb. 20 that in order to process withdrawals, FTX Japan users would need to confirm their account balances and transfer them to a Liquid account. Withdrawals resumed at 3:00 am UTC on Feb. 21 for the first time in more than three months.
FTX Japan had been part of its parent company’s proceeding in filing for bankruptcy in November 2022, when the firm froze assets for roughly 9 million users, removing access to millions of dollars. An NHK report at the time said that FTX Japan had roughly 19.6 billion yen in cash — more than $138 million — when it ceased operations, suggesting that there may be roughly $90 million left for users as of Feb. 22.
Due to bankruptcy proceedings in the United States, most FTX users, including those at FTX US, have been unable to withdraw their assets since November. The case is moving forward in U.S. Bankruptcy Court for the District of Delaware, in which the judge denied a motion to appoint an independent examiner, citing the expense involved.
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Turner Wright
The federal judge presiding over the case for former FTX CEO Sam “SBF” Bankman-Fried has ordered a superseding indictment unsealed containing 12 criminal counts.
In the indictment filed with the United States District Court for the Southern District of New York on Feb. 22, U.S. Attorney Damian Williams alleges Bankman-Fried’s actions in the matter involving FTX and Alameda warranted 12 charges. According to the indictment, these included eight conspiracy charges related to fraud as well as four charges for wire fraud and securities fraud.
The original indictment against Bankman-Fried, announced on Dec. 13, included eight similar charges, while the superseding indictment mentions an additional charge for conspiracy to commit bank fraud and breaks down individual wire fraud charges related to his alleged actions at FTX and Alameda. At the time, prosecutors also listed conspiracy to commit commodities fraud in its charges, which was seemingly included in the superseding indictment related to the “purchase and sales of derivatives” at FTX.
According to the indictment, Bankman-Fried committed fraud in opening a bank account and attempting to obtain user deposits:
“[Bankman-Fried and others] falsely represented to a financial institution that the account would be used for trading and market making, even though [he] knew that the account would be used to receive and transmit customer funds in the operation of a cryptocurrency exchange, and thereafter, in connection with using the account for the receipt and transmission of customer funds, omitted material facts in a manner that made what was communicated misleading.”
A new superseding indictment against FTX cryptocurrency exchange founder Sam Bankman-Fried containing 12 charges was unsealed in Manhattan federal court — Reuters Legal (@ReutersLegal) February 23, 2023
In regard to the allegations involving unlawful political contributions, the filing said SBF and others used “straw donors” or corporate funds to make more than 300 contributions totaling “tens of millions of dollars.” Using straw donors, the U.S. attorney alleged, allowed Bankman-Fried to “evade contribution limits on individual donations” as enforced by the Federal Election Commission — usually $100.
“While employees at Alameda generally tracked loans to executives, the transfers to Bankman-Fried [and two other FTX executives] in the months before the 2022 midterm elections were not recorded on internal Alameda tracking spreadsheets,” said the filing. “Instead, an internal Alameda spreadsheet noted over $100 million in political contributions, even though FEC records reflect no political contributions by Alameda for the 2022 midterm elections to candidates or PACs.”
The former FTX CEO has largely been confined to his parents’ California home since a December bail hearing, in which his mother and father agreed to put up the equity from their house as part of Bankman-Fried’s $250-million bond. Two employees of Stanford University — research scientist Andreas Paepcke and former law school dean Larry Kramer — also signed on as sureties for Bankman-Fried’s bail for $200,000 and $500,000, respectively.
Bankman-Fried’s criminal trial in federal court is scheduled to begin in October, while FTX’s bankruptcy case is ongoing in U.S. Bankruptcy Court for the District of Delaware. Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pled guilty to similar charges as SBF in a plea deal, with many experts speculating they may offer testimony in his case.
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This Daily Dose was brought to you by Cointelegraph.
