Allie Eve Knox produces grownup content material.
She tends to make sexually provocative video clips, sells membership solutions on platforms like OnlyFans, performs are living by using webcam, and will work as a findomme – limited for money dominatrix, a fetish involving dominance-submission dynamics and hard cash.
The Texas indigenous is also a important advocate of cryptocurrency.
Knox describes herself as “a person of the most outspoken intercourse staff, significantly for crypto.” Her curiosity kicked off in 2014, which is when she claims various distributors, which includes PayPal, Sq. Hard cash, and Venmo, shut down her accounts for the reason that of pink flags associated to intercourse operate.
So Knox started out accepting cryptocurrencies rather. Her very first trade of bitcoin for content material was quite everyday.
It started out on a Skype contact with a customer. “I experienced a Coinbase account at the time, and he claimed, ‘Hold your QR code proper to this digicam below,’ and he despatched it as a result of the digicam. And I bought it,” she discussed.
It took fifteen minutes, and there had been no chargebacks, no web-site fee charges, and no lender intermediaries to flip down the transaction – all important pluses in her field. But the most important attraction was possessing whole and irreversible possession more than the funds she experienced acquired.
“I could hard cash it out. I could maintain it. I could view it go up and down,” claimed Knox.
“It was mine.”
Knox is a person of a lot of grownup staff who say that cryptocurrencies like bitcoin give them a feeling of protection and independence as banking institutions, credit rating card firms, and payment processors tighten rules all over grownup content material. With crypto, there is no intermediary earning a judgment contact on which transactions are suitable.
OnlyFans and the coverage whiplash
Intercourse operate is an umbrella expression that features everyone who engages in some type of erotic labor, whether or not digital or in particular person.
“The greater part of intercourse operate in the U.S. is lawful. It can be not dealt with pretty, but it is really even now lawful,” discussed Kristen DiAngelo, an activist and Sacramento-based mostly intercourse employee who has invested more than 4 many years in the field. “Stripping is legal…massage is legal…escorting is lawful. The only matter which is truly unlawful in the U.S. is the genuine trade of sexual action for remuneration, for funds.”
Some escorts – who demand everywhere from $one,seven hundred an hour to $eleven,000 for a entire 24 several hours – now explicitly say in their adverts that they desire to be paid out in bitcoin or ethereum.
The intercourse operate field also features performers on the common membership video clip web site OnlyFans, many of whom work exclusively online and have never seen their subscribers or fans in person.
Allie Rae is a 37-year-old mother of three boys who says she went from making about $84,000 a year as an ICU nurse in Boston to $1.3 million, thanks to her work on OnlyFans, which has more than 130 million users.
Last August, Rae didn’t know a lot about cryptocurrency, nor did she accept it for her work, but she was convinced that bitcoin and other altcoins were “100% the future,” because they seemed like a far more secure method of payment.
At the time, OnlyFans was navigating a publicity nightmare. After banks started flagging and rejecting transactions on the site, OnlyFans announced plans to ban sexually explicit content, its core product. The decision was met with such blowback that OnlyFans reversed course within days.
The whole episode gave whiplash to OnlyFans performers, some of whom realized that they were just one company policy change away from financial ruin.
Rae, a star of the OnlyFans ecosystem, was spooked, telling CNBC that she felt “kicked to the curb,” and never wanted to be put in that position again.
So she took action.
She started with the basics, teaching herself the fundamentals of crypto, then decided to put real skin in the game by assembling a team of developers to build WetSpace, a cryptocurrency-powered adult entertainment platform, into which she has vowed to invest $1 million of her own money. As Rae describes it, WetSpace will be a place where creators don’t have to worry about “big banking restrictions and payouts.”
By December, Rae had gone from bitcoin novice and OnlyFans ingénue to an adult content entrepreneur speaking fluent crypto, with terms like “smart contracts” and “ERC-20 tokens” rolling right off her tongue.
Adult content creators have also jumped on the non-fungible token, or NFT, bandwagon. Knox tells CNBC she’s sold photos of herself as NFTs on OpenSea and through SpankChain’s custom NFT marketplace. Thus far, the most she’s gotten from a single sale is $1,200 worth of ethereum.
The disenfranchised strike back
DiAngelo tells CNBC she will never forget the first time her bank account was closed without warning.
It happened when she was on a trip to Washington, D.C. over a decade ago.
“I had just gone into the bank, made a deposit, and I went to buy lunch in Dupont Circle,” said DiAngelo. “I gave him my card, and it was declined. I gave him my card, and it was declined again. And I gave my card again, and it was declined again. And I was like, ‘No, no, no, no, that can’t be right. There’s something wrong.'”
DiAngelo called Citibank and learned that her account had been frozen and she should tear up her credit card. DiAngelo says the customer service rep told her that they weren’t “at liberty” to tell her why it had happened, and she would have to write a formal letter to request additional details.
They did, however, say that she was still responsible for any money owed.
“That put fear in my heart, like I thought my world was collapsing. My bank account was frozen. I couldn’t access my money,” she said. (Citibank did not respond to a request for comment.)
There was particular irony in her situation, as DiAngelo did a stint as a stockbroker at Citibank in the 1980’s, always pays her taxes, and has a credit score over 800.
Allie Eve Knox
Allie Eve Knox
So DiAngelo did what other sex workers do: She “platform hopped,” meaning that she brought her money to another bank. When they also flagged and closed her account, she moved on to the next. After being shut out of a third bank, DiAngelo says she turned exclusively to bitcoin for her online banking needs.
Nearly every sex worker interviewed for this story mentioned platform hopping. The government has a set of anti-trafficking guidelines drawn up by the Financial Crimes Enforcement Network, or FinCEN, and the banks and big payment apps keep an eye out for activity deemed suspicious by those guidelines. Those red flags include making cash deposits frequently – a hallmark of the sex work profession.
“We will change, we will pivot, we’ll go to other platforms,” Knox said. “This is just a constant like jumping through hoops cycle.”
In 2014, for example, PayPal booted her because of a payment for her used socks that was large enough to get red-flagged. Knox says neither she nor the buyer were refunded. (PayPal tells CNBC that her account was “closed due to policy violations.”)
Later, in 2016, Coinbase closed her account and blocked her from making others. (Coinbase acknowledged to CNBC that its terms of service prohibit the use of its “commerce or retail services connected to adult content.”)
“We’re the ones being punished – not the traffickers, not those that are actually abusing workers,” said Alana Evans, who has been an adult performer since the late 90’s. Evans is currently president of the Adult Performance Artists Guild, or APAG, a federally recognized union within the adult industry that represents all workers from adult film set actors, to content creators.
“They’ve attacked our banking; our ability to operate like the rest of the world,” explained DiAngelo. “You don’t exist if you can’t use the banking system.”
Evans says that once you’ve been in the industry and labeled as an adult performer, it is virtually impossible to get a job outside the industry – even at a fast food restaurant.
“We are stigmatized. We are discriminated against,” said Evans, who is actively looking to foment change in her role as the head of APAG. She says she has met directly with Mastercard and other companies to address the issue, and she is advocating with members of Congress to add occupation to the list of protected title practices, which currently includes race, age, and religion.
Mastercard confirmed the meeting with Evans, saying that the company “welcomes dialogue and different perspectives” about its policies and programs.
For many sex workers, bitcoin is more than a way to reclaim financial independence — it’s an industry standard.
In 2018, the U.S. passed a federal law designed to eliminate online sex trafficking. The Fight Online Sex Trafficking Act and Stop Enabling Sex Traffickers Act, or FOSTA-SESTA, meant that owners of web sites could face criminal charges for content that promoted trafficking.
“It meant any site online, or any venue that does business online, that could possibly receive profits for prostitution in any way could be indicted and do 25 years in prison,” explained DiAngelo, who is currently a researcher and lecturer at the University of California, Davis.
FOSTA-SESTA spelled an end for Backpage – once the bastion of online advertisements for sex workers — and persuaded Craigslist to discontinue its personal ads.
But critics say the net effect of this law was to drive the trade further underground. Workers lost the ability to pre-screen clients, and many in the industry tell CNBC it led to a spike in street work and violence.
It also turned bitcoin into a necessity for many escorts. Advertising is essential to attract new business, and workers using popular escort directories like Slixa and Eros tell CNBC that these platforms encourage payment in cryptocurrencies within the U.S. One industry vet says typical ads cost $480 worth of bitcoin for two weeks.
Eros did not respond to a request for comment, while Slixa shared in a written statement that it “does not advertise or have as advertisers ‘sex workers’ as that term is traditionally defined,” and that it takes multiple forms of payment.
“I think that in some ways crypto offers a way forward,” said Mike Stabile, a spokesman for the Free Speech Coalition, which is an adult video trade group that advocates for the rights of sex workers.
“It means that you can move away from these handful of payment processors, the handful of credit cards that seem to control what content can be sold,” continued Stabile.
Mastercard disputes the assertion that it’s biased against sex workers. “Let us be clear – allegations of bias against adult content creators are demonstrably untrue. Our actions and business practices against trafficking and exploitation clearly show this.”
One hazard of the trade are chargebacks, in which a transaction is reversed when a consumer claims they have been fraudulently charged for a good or service they did not receive. It is a tool designed to protect consumers, but many sex workers say it is a tool that is abused in their industry by clients who dispute a transaction for a product or service they have already received.
Take OnlyFans. There are some customers who will dispute a transaction once they’ve already received custom video clips, or photos. OnlyFans’ official policy on its website says the creator, not the company, foots the bill for a chargeback. (OnlyFans did not respond to requests for comment.)
Many models have taken to forums like Reddit to share their experiences, in which they say these alleged scammers will sometimes put in for a chargeback six months after receiving pictures or videos.
Transactions in cryptocurrencies are final, rendering chargebacks impossible.
Online, the adult industry often leads technology shifts, and that’s certainly been the case with crypto.
UK-based escort agency VIP Passion started to accept bitcoin in 2013. Two years later, Backpage made a similar move into bitcoin, litecoin, and dogecoin after Visa and Mastercard refused to process payments for its “adult” section.
Visa said at the time that the company’s rules prohibited the network from “being used for illegal activity” and that Visa had a “long history of working with law enforcement to safeguard the integrity of the payment system.” Mastercard issued a similar statement, saying that the card company has rules prohibiting its cards from “being used for illegal or brand-damaging activities.”
Pornhub – one of the world’s most highly trafficked websites – began accepting a crypto token called verge in 2018. As litecoin creator Charlie Lee noted at the time, the porn field is generally a “primary indicator of technological know-how adoption,” so he was “happy to see them opening up to cryptocurrency.”
When PayPal determined to halt payouts to more than a hundred thousand Pornhub performers, the web site additional tether (a stablecoin pegged to the rate of the U.S. greenback) as an different selection. In Dec. 2020, Pornhub went entire crypto in some nations following Mastercard and Visa lower ties with the system more than statements of unlawful content material operating rampant on the porn web site.
In a assertion to CNBC, Mastercard claimed its final decision was “based mostly on an inner investigation that verified violations of our benchmarks prohibiting illegal content material on their web site.” Visa did not react.
Allie Eve Knox
Allie Eve Knox
These days, it is really par for the class to see grownup internet websites settle for cryptocurrency, and some offer in it solely.
Chaturbate and FanCentro settle for electronic tokens, and are living-streaming webcam system Stripchat tells CNBC that 23% of its energetic versions are now paid out in a combine of cryptocurrencies which includes bitcoin, ethereum, and USDC, which is a stablecoin pegged to the benefit of the U.S. greenback. Prospects can also depart guidelines, and the firm claims its greatest idea but was $one hundred,000 deposited in tether.
It aids that latest developments in payment technological know-how have designed it less difficult than at any time to transact in cryptocurrency. The Lightning Community, for illustration, is a payments system created on bitcoin’s foundation layer that allows almost instantaneous transactions.
“An OnlyFans that is Lightning based mostly could quickly endure the kind of censorship they confronted in August,” discussed Boaz Sobrado, a London-based mostly fintech information analyst. “Political strain and stigma can be used to card firms, which can then make it really hard for or else lawful organizations like OnlyFans to function.”
“This whole vector is eradicated if you have a payment technique which isn’t going to put up with from political pressures. And which is the situation with the Lightning Community, which has low-cost payments, quick transactions, and is not quickly censorable,” ongoing Sobrado.
Some grownup media firms have even turned to blockchain technological know-how to acquire their possess electronic currencies and platforms.
SpankChain is a cam-web site created on ethereum’s blockchain that, amongst other issues, attempts to make it less difficult for grownup performers to securely get paid out on-line. LiveStars, also created on ethereum, is an grownup streaming system and social community that claims bigger privateness and protection to consumers, furthermore comparable payment answers that intend to make transactions speedier and additional worthwhile for the performer – which is sizeable to staff who are accustomed to spending forty% to fifty% fee charges on common platforms that operate on fiat payment rails.
CumRocket – which Elon Musk appeared to back again in two cryptic tweets last June – has its possess NFT market and token, which can be utilized to idea and concept content material creators.
Volatility and finding out curve existing complications
Stabile warns there are even now limitations to mass crypto adoption amongst intercourse staff.
For a person, there is certainly a steep finding out curve for equally staff and consumers. Intercourse staff have published and circulated guides on-line on how to use crypto, but a sizable know-how hole continues to be.
It is also hard to get some consumers to shell out their bitcoin on grownup content material.
“They usually use it as a retail outlet of benefit,” claims Stabile. “It can be a speculative forex.”
Knox claims generally purchasers select not to fork out her in crypto.
“Which is the hurdle that we are at proper now. We can just take it all working day extensive, but until finally people today start off employing it and start off spending us with it, it is really not likely to truly just take off for adoption,” claimed Knox.
Intercourse staff who do settle for crypto also have to contend with risky costs, which can lower into their earnings. For occasion, bitcoin is down additional than forty% from its November all-time significant.
Evans tells CNBC she trapped it out as a result of the multi-yr crypto wintertime that started in late 2017, when costs plunged.
“I basically experienced a paycheck that was truly worth a person-tenth of what it was, for the reason that I held on to it,” discussed Knox. “It can be just an up-and-down form of roller coaster. Which is the splendor and the suffering of crypto.”
That volatility can produce upside, also.
When Knox started accepting cryptocurrency in 2014, it was mostly for usefulness, relatively than any feeling of crypto as a extensive-expression financial investment. In her early times, Knox tells CNBC she would get two bitcoin in trade for an hour-extensive Skype session. A solitary bitcoin is now truly worth all over $forty,000, and has been as significant as $sixty nine,000.
“I just form of still left it on the backburner and would accumulate it every time people today would fork out me in it,” claimed Knox, who tells CNBC she even now retains a superior part of her crypto stake. “I gathered until about 2017 and then crypto went outrageous. It was a person of these issues where by I was like, ‘Oh, wow, this was an accidental terrific financial investment for me.'”
Outside of rate volatility, buying and selling in crypto generally incurs excess charges.
“Getting the crypto to fork out for [ads] was normally fraught with all these concealed charges that these buying and selling web sites would be charging,” claimed San Francisco-based mostly Maxine Doogan, who has been doing the job as a prostitute for additional than 30 a long time.
Alternatively of employing a common trade like Coinbase, Doogan rather goes as a result of a convoluted system that requires discovering an middleman by using a buying and selling web site, and then depositing hard cash into that person’s lender account, trusting that they will then electronically transfer bitcoin into her crypto wallet. Some of these intermediaries will settle for present playing cards. Other individuals inquire intercourse staff to invest in a common “vanilla” credit rating card and deliver them the figures, in hopes that they will observe as a result of on the trade.
DiAngelo claims that in the early times of crypto, she would use bitcoin ATMs at liquor outlets and gasoline stations to deposit hard cash to invest in bitcoin. These equipment demand commissions earlier mentioned and further than the expense of the transaction.
Yet another important trouble relates to the procedures that govern cryptocurrency exchanges. Several platforms like Coinbase need know-your-client, or KYC compliance. In follow, that implies possessing to join an ID and lender account to the system – a non-starter for a lot of doing the job in the field.
Since of this, some staff later on uncover they are unable to hard cash out the crypto they have acquired for products and solutions or solutions rendered.
Whilst there are tokens made with privateness and anonymity in intellect (zcash and monero, for illustration), the blockchain technological know-how that underpins cryptocurrencies like bitcoin is clear by style, primary some in the field to fear that with the proper instruments and crypto know-how, good friends, spouse and children, or the federal government technically have the potential to observe their ways.
But Rae continues to be confident that cryptocurrency is the long run for the intercourse operate field.
“Cryptocurrency is our only selection. I really don’t really feel like we are likely to endure underneath stricter and stricter procedures from the banking field,” claimed Rae.
“For people today like me earning thousands and thousands of pounds, a 30 working day detect from OnlyFans would be the stop of us. Crypto truly feels like it is really kinda it, or else we are likely to be managed for good and who understands the form of content material they are likely to continue on to ban. They can flip you off tomorrow.”