The truth, of course, is that it's a type of squid, just a really freaking weird one. The piglet squid, as it's commonly known, is rarely photographed, since it prefers to lurk far below the surface, and as a result little is known of its behavior, other than its penchant for looking huggable. For reasons inexplicable to all but a sarcastic god, its tentacles approximate a child's curly head of hair, and its skin patterns resemble an innocent smiling face, best seen on its semi-transparent younger form:
Also, those large anime-inspired eyes actually twinkle, since they possess light-emitting organs called photophores. Its cute appearance is nothing but an unfortunate cosmic coincidence, because these things actually swim upside down: That photo up there may look like a smiley face to you, but turn it around and suddenly it's Cthulhu as a baby.