SpankPay and the Current State of Adult Crypto
The adult business could undergo many revolutions thanks to blockchain technology. The capacity to conduct safe and anonymous financial transactions, which is crucial in the adult business, is one of blockchain’s most critical advantages. Adult entertainment takes pride in being a pioneer and early adopter of privacy technology to conceal the identities of online users, particularly if those individuals are watching otherwise lawful adult content in areas where it is prohibited.
Furthering this, it is equally crucial to protect the confidentiality and safety of adult performers and professionals. Ingenious and activist individuals of the adult entertainment industry have come up with techniques to create a secure transaction pathway without relying on the overly centralized financial institutions due to an epidemic of ongoing financial discrimination against professionals in the sector.
The SpankPay Case
SpankPay was one notable effort to combat financial discrimination in the adult business. SpankPay offered payment services for SpankChain, an adult industry and sex workers-led alternative to established cryptocurrency exchanges, as Samantha Cole of Vice News explains. To combat prejudice, SpankChain was created in 2017 and SpankPay was introduced in 2019.
SpankPay, however, had a setback early this year when they declared via Twitter that they had to cease some services because some of their vendors had made a targeted, discriminating business choice. The decision to discontinue SpankPay was made after “long and difficult consideration.” Another tweet in the same thread accuses the cryptocurrency on-ramp provider Wyre and their payment processor, Checkout.com, of halting SpankPay services since these businesses and individuals are not accepted by their ecosystems, which include these companies. This alteration, according to SpankPay, was a “shock,” as SpankPay’s “relationship with Wyre had been supportive and respectful up until this point.”
The Decline of Adult Crypto
A blockchain-based coin called Vice Industry coin (VIT) was used to pay for adult material and communicate with adult entertainers. The token, however, broke. To try and integrate other payment methods on the site, Playboy Enterprises sued Global Blockchain Technologies, the organization behind VIT, based in Vancouver, British Columbia, on claims of fraud and contract breach.
The Los Angeles Times added that the lawsuit asserts a processing services agreement between them and Playboy Enterprises. Global Blockchain allegedly failed to make good on its support and failed to pay a sum that was estimated to be well over $4 million, according to Playboy Enterprises. Significant headlines were made about VIT, however the token ultimately failed. This just leaves a small number of adult entertainment choices for cryptocurrency-based payments. The untimely passing of SpankPay now tightens the screws even further. In fact, after the publication of a biased investigative commentary on the cases of CSAM on Pornhub by controversial New York Times opinion contributor Nicholas Kristof, pornstar Siri Dahl recently remarked at a premiere event for the Netflix exclusive documentary, “Money Shot: The Pornhub Story,” that SpankPay was one of the best alternatives to beat credit card companies and mainstream payment processors blocking out the controversial tube site.
“At the [Netflix] premiere of #MoneyShotMovie, an audience member inquired as to whether any adult businesses had experimented with cryptocurrency as a means of getting past [Visa and Mastercard] payment constraints and censorship. Yes, is the response. Additionally, SpankPay, the best one we had, recently had to close. This is the outcome of institutionalized financial prejudice against businesses and individuals working in the adult industry. The major banks and financial institutions engage in a practice known as banking discrimination when they blatantly and potentially illegally refuse to provide services to people or companies engaged in the production, distribution, or sale of adult goods or services, including online porn.
Banking Discrimination
Such discrimination can take many other forms, such as being refused access to other payment processing systems, bank loans, credit cards, savings and checking accounts, and other financial products. Due to moral objections or worries about reputational harm, financial institutions may refuse to do business with entities and persons involved in the adult industry. For those who work in the adult sector, this might result in serious financial difficulties, such as a lack of access to essential banking services and higher transaction expenses. Some banks also set limitations on the kinds of transactions that can be done by enterprises in the adult sector. For example, they might restrict the amount of money that can be deposited or withdrawn or charge more for transactions involving pornography and sex.
Banking discrimination in the adult industry is contentious because it calls into doubt people’s rights to free speech and to conduct lawful business. Some contend that financial institutions shouldn’t be able to discriminate against those working in the adult industry, while others think banks should be free to refuse to work with those in the adult sector.
Potentially illegal is the attitude that supports financial discrimination against otherwise legal activity. The Office of the Comptroller of the Currency (OCC), a department of the U.S. Department of Treasury, oversees the regulation of banking access and equity. OCC requires equitable access. However, the so-called fair access rule is still in limbo and is likewise regarded as being quite contentious.
To address this blatant financial and banking prejudice, however, the OCC, the financial services sector, and the adult industry must collaborate. Crypto will endure while we wait. That’s great, but it’s also important for nearby payment processing and financial technology providers to recognize that adult entertainment businesses aren’t illegal enterprises and should have the same access to banking and decentralized financial products, like cryptocurrency payments.
One more thing. Adult Business Consulting CEO and host of the podcast Adult Site Broker Talk, Bruce, has conducted numerous industry interviews on the topic of banking prejudice. The segments with Mike Stabile and Alison Boden, both from the Free Speech Coalition, are of particular importance.
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