Bitcoin a lifeline for sex workers, like ex-nurse making $1.3 million

Allie Eve Knox creates adult content.

She makes sexually provocative videos, sells subscription services on platforms like OnlyFans, performs live via webcam, and works as a findomme – short for financial dominatrix, a fetish involving dominance-submission dynamics and cash.

The Texas native is also a major advocate of cryptocurrency. 

Knox describes herself as “one of the most outspoken sex workers, particularly for crypto.” Her interest kicked off in 2014, which is when she says several vendors, including PayPal, Square Cash, and Venmo, shut down her accounts because of red flags related to sex work.

So Knox started accepting cryptocurrencies instead. Her first exchange of bitcoin for content was pretty casual. 

It started on a Skype call with a client. “I had a Coinbase account at the time, and he said, ‘Hold your QR code right to this camera here,’ and he sent it through the camera. And I got it,” she explained.

It took 15 minutes, and there were no chargebacks, no website commission fees, and no bank intermediaries to turn down the transaction – all major pluses in her industry. But the biggest attraction was having total and irreversible ownership over the money she had earned. 

“I could cash it out. I could hold it. I could watch it go up and down,” said Knox.

“It was mine.”

Knox is one of many adult workers who say that cryptocurrencies like bitcoin give them a sense of security and independence as banks, credit card companies, and payment processors tighten regulations around adult content. With crypto, there is no middleman making a judgment call on which transactions are acceptable. 

The sex work industry also includes performers on the popular subscription video 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. 

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. 

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 industry is often a “leading indicator of technology adoption,” so he was “glad to see them opening up to cryptocurrency.” 

When PayPal decided to stop payouts to over a hundred thousand Pornhub performers, the site added tether (a stablecoin pegged to the price of the U.S. dollar) as an alternative option. In Dec. 2020, Pornhub went full crypto in some countries after Mastercard and Visa cut ties with the platform over claims of illegal content running rampant on the porn site. 

In a statement to CNBC, Mastercard said its decision was “based on an internal investigation that confirmed violations of our standards prohibiting unlawful content on their site.” Visa did not respond.

Nowadays, it’s par for the course to see adult websites accept cryptocurrency, and some deal in it exclusively.

Chaturbate and FanCentro accept digital tokens, and live-streaming webcam platform Stripchat tells CNBC that 23% of its active models are now paid in a mix of cryptocurrencies including bitcoin, ethereum, and USDC, which is a stablecoin pegged to the value of the U.S. dollar. Customers can also leave tips, and the company says its largest tip yet was $100,000 deposited in tether.

It helps that recent advancements in payment technology have made it easier than ever to transact in cryptocurrency. The Lightning Network, for example, is a payments platform built on bitcoin’s base layer that enables virtually instantaneous transactions.

“An OnlyFans that is Lightning based could easily survive the sort of censorship they faced in August,” explained Boaz Sobrado, a London-based fintech data analyst. “Political pressure and stigma can be applied to card companies, which can then make it very difficult for otherwise legal businesses like OnlyFans to operate.”

“This entire vector is removed if you have a payment system which doesn’t suffer from political pressures. And that’s the case with the Lightning Network, which has inexpensive payments, easy transactions, and is not easily censorable,” continued Sobrado.

Some adult media companies have even turned to blockchain technology to develop their own digital currencies and platforms.

SpankChain is a cam-site built on ethereum’s blockchain that, among other things, tries to make it easier for adult performers to safely get paid online. LiveStars, also built on ethereum, is an adult streaming platform and social network that promises greater privacy and security to users, plus similar payment solutions that intend to make transactions faster and more profitable for the performer – which is significant to workers who are accustomed to paying 40% to 50% commission fees on traditional platforms that run on fiat payment rails. 

CumRocket – which Elon Musk appeared to back in two cryptic tweets last June – has its own NFT marketplace and token, which can be used to tip and message content creators. 

While there are tokens designed with privacy and anonymity in mind (zcash and monero, for example), the blockchain technology that underpins cryptocurrencies like bitcoin is transparent by design, leading some in the industry to worry that with the right tools and crypto know-how, friends, family, or the government technically have the ability to track their steps.

But Rae remains convinced that cryptocurrency is the future for the sex work industry.

“Cryptocurrency is our only option. I don’t feel like we’re going to survive under stricter and stricter rules from the banking industry,” said Rae.

“For people like me making millions of dollars, a thirty day notice from OnlyFans would be the end of us. Crypto really feels like it’s kinda it, otherwise we’re going to be controlled forever and who knows the kind of content they’re going to continue to ban. They can turn you off tomorrow.”