The Future

Sex work is moving to blockchain payments

A new cryptocurrency aims to offer sex workers a way to take payment in a digital world that does not welcome them.

A little over a year ago, with the help of PayPal and SquareCash, a pissed-off client stole over $2000 from Goddess Venus. The NYC-based humiliatrix opened her accounts one day to discover they’d been suspended, her money returned to a man with buyer’s remorse who had been harassing her on social media for weeks. Anything sex-related violates PayPal and SquareCash’s terms of service, but like many sex workers, Goddess Venus had taken the risk of using the platforms anyway — they’re too ubiquitous to avoid. “I think he’d gotten upset and reported me, knowing I would lose my account,” she told The Outline.

Around the same time, a friend of hers who had started investing in cryptocurrency convinced her to give it a try. As she grew her business online, recording clips and fostering financial domination relationships, she always offered Bitcoin as a payment option. At the beginning, few clients took her up on it, but the number has steadily increased. Now, she said, “I would prefer it if all my clients paid in crypto. For a lot of sex workers, it’s the best option.”

Faced with a hostile payment landscape that either denies them access or charges them exorbitantly for it, many sex workers are, like Goddess Venus, becoming cryptocurrency evangelists. What to some users is a trendy gamble is to them a godsend, a way to finally secure their livelihoods against the moral judgments and chargebacks that make their work needlessly expensive and precarious. “You’re worried about your money, and your clients are worried about their privacy,” said Empress Katana, a dominatrix in Washington, D.C. who has used crypto for six years and accepted it as payment for two. “Crypto is beyond private. It’s a win-win.”

The crypto world has yet to fully meet sex workers’ need for tailored solutions, although some entrepreneurs are trying with new sites and industry-specific coins. This week saw the launch of the first blockchain camsite, SpankChain, which is built on Ethereum with its own token, Spank. “What the industry and performers need is a way to safely and securely store their money,”  SpankChain’s CEO and founder, Ameen Soleimani, told The Outline. “We’re going to be the first project in crypto that actually has a real use case.”

Early adopters of cryptocurrency like Empress Katana and Goddess Venus say clients have specifically sought them out because of it. Brenna Sparks, a performer who has used Bitcoin since 2013, told The Outline she thinks that blockchain will also solve other pervasive issues within the industry, like bounced checks and broken contracts, which are hard to resolve when the work involved is stigmatized. “These things happen because they can, and there is not much we can do about it,” she said. “We are at the mercy of each other's actions, with performers by far being most vulnerable.”

Government pressure for cryptocurrencies are on the horizon. In February, the SEC’s chairman warned that his agency has its eye on staking tokens like Spank, and may soon formally classify them as securities. Because SpankChain allowed U.S. buyers in its ICO, it will likely be subjected to any resulting regulatory actions. Soleimani said that his company’s ICO “complied with all applicable laws” under the guidance of their legal counsel; the terms and conditions, which Soleimani shared with The Outline but are no longer online, include the phrase, “I affirm that neither my purchase of SpankCoin nor anything related to the SpankChain project violates any law of the country and legal jurisdiction in which I reside.”

This is likely not enough. “The SEC has commented repeatedly that they feel lawyers advising on ICOs over the past year have essentially not been doing their jobs as gatekeepers, giving legal advice that is not kosher in the securities world,” said Angela Walch, who researches blockchain and emerging financial technology at St. Mary’s University School of Law. It’s unclear what SEC enforcement would look like, but it may include mandating platforms to return the proceeds of coin sales to investors. Whatever happens, Walch said, tokens can’t live up to their promises under current guidelines. “Proponents talk about how it’s going to be utterly transformative, and I’m skeptical of that.”

The sex industry has long held this tenuous place in the vanguard of technology, adopting new protocols early but at risk for punishment. As soon as people could exchange things online, they exchanged porn — copyrighted pictures, through Usenet and elsewhere, beginning in the late 1980s; and then streaming video. The industry was among the first to test online credit card processing. When payment apps began to appear, sex workers flocked to those, too. “When PayPal was starting out, a lot of their money originally came from sex work, so it’s frustrating that they treat us this way now,” said Goddess Venus.

But once the sex industry helps to mainstream a new system, it’s almost always booted off for being a liability. This is where sex workers find themselves continually stuck — offering an entrepreneurial service that few entities are willing to help them sell, even when it’s legal. “Sex workers get discriminated against everywhere, especially in the banking industry,” said Russian Queen M, a domme in Montreal.

Every major payment app restricts adult-related transactions to some degree, treatment that lumps sex work in with scams, hate speech, weapons, stolen goods and drugs. Payment processors justify the exclusion based on classification of the adult industry as a high-risk business category, the same reason banks have also cited for shutting down accounts. Frequent chargebacks are expensive things to cover, but these institutions also take cover under morality clauses. “It’s a catch-all excuse to prohibit something legal but that is, in their judgment, not acceptable within subjective rules of taste,” Myles Jackman, an obscenity lawyer in Britain who often represents sex workers, told The Outline. “It’s an absolutely laughable practice in the 21st century.”

And, as is usually the case with crackdowns on sex work, it’s the workers, not their clients, who are punished. “The guy doesn’t get deleted for paying for these services, but the person providing them does,” Goddess Venus said. When the transaction isn’t just a cash tribute for financial domination, but a purchase of content or a service, a chargeback amounts to theft. “You could sell $300 of clips and then find out the guy did a chargeback, and he has your content, and you have nothing,” said Empress Katana. It is even worse for full-service sex workers, who risk not just losing access to a platform but arrest if clients maliciously report them.

Under these conditions, the only way for sex workers to guarantee they won’t abruptly lose income is through processors, like IndieBill, OnlyFans, and iWantClips, dedicated to or openly accepting of the adult industry. The protection comes at a price, though: these sites also pass on the higher processing fees that credit card companies and banks levy on adult transactions, taking anywhere from 15 to 50 percent of performers’ earnings. And even these platforms restrict, out of an abundance of caution, certain types of content likely to fail the Miller test: age play (feigning being underage, anywhere from a toddler to a teenager), menstrual blood, golden showers, and any simulation of acts like incest and rape are usually prohibited.

Crypto circumvents all these issues. Because blockchains are an immutable, identity-linked ledger, chargebacks are impossible: evidence that someone paid for something is fully verifiable. Fees are limited to gas, the tiny tithes paid to miners for adding a transaction to a block; there’s no centralized entity that needs higher fees to stay in business. And because transactions just show up as code, there’s no way to discriminate based on their content — no one cares whether the item being exchanged is a hairbrush or a video of someone getting spanked with one.

SpankChain is designed to take advantage of all of this, making it “an obvious choice for [sex workers] who wish to implement blockchain technology into their work,” said Sparks. It promises an unheard-of 95 percent payout to performers, since there are no bank fees to pass on and no chargebacks to worry about. Their ambitious promises have generated widespread excitement: Soleimani said that the platform has already registered 400 performers, and their pre-launch ICO last November raised nearly $24 million. They’ll transmit whatever people want to broadcast, too. “As long as it is legal, I have no problem showing it. There is not a bank that will put pressure on us to not display content,” said Soleimani.

It’s leaving on the table, though, a more pressing use case: an answer to FOSTA, the so-called “anti-trafficking” bill passed earlier this month that shut down Backpage and the Craigslist personals section, putting the lives of full-service sex workers at risk. SpankChain announced a $25,000 bounty for information on sex work clients who voted for the bill, then decided instead to encourage users to call Congress, but Soleimani said his company has “no immediate plans to incorporate personals.” Wary of FOSTA attention, SpankChain’s site devoted to the issue notes that the company “[does] not  condone illegal activity” — like full-service sex work.

Despite its uncertain future, many sex workers are moving more and more of their business away from traditional currency. Empress Katana has stopped using PayPal or other cash apps that discriminate against sex workers in her personal life and is helping more and more of her clients learn how to use crypto. Goddess Venus isn’t as proactive professionally, but she’s investing her own money in the crypto market.

Russian Queen M is on track to go full crypto by the end of this year. She’s also spent the last year teaching other dommes how to follow her, via a group chat on Twitter. “I would show someone how to set up a wallet, and if they did it, I sent them $5,” she said. “I’m very passionate about sharing it with other women, because it’s the future.”

Zoë Beery is a freelance journalist in New York. She previously reported on saying goodbye to your happy plantation narrative.