Bitcoin has become a lifeline for s.e.x workers, such as this former nurse who earned $1.3 million last year

Allie Eve Knox is an adult content creator.

She creates sexually explicit movies, sells subscription services on sites like OnlyFans, performs live via webcam, and works as a findomme — short for financial dominatrix, a fetish incorporating dominance-submission dynamics and income.

The native of Texas is also a strong supporter of bitcoin.

Knox considers herself to be "one of the most outspoken sex workers, particularly for crypto." Her curiosity began in 2014, when she claims multiple merchants, including PayPal, Square Cash, and Venmo, closed her accounts due to red flags relating to sex industry.

As a result, Knox began taking bitcoins instead. Her first bitcoin exchange for content was rather casual.

It all began with a Skype conversation with a client. "At the time, I had a Coinbase account, and he said, 'Hold your QR code right here to this camera here,' and he sent it through the camera." "And I got it," she said.

It took 15 minutes, and there were no chargebacks, website commission fees, or bank intermediates to reject the transaction - all of which are significant advantages in her profession. The most appealing aspect, though, was having complete and irrevocable control over the money she had made.

"I'd be able to cash it out." I was able to keep it. "I could watch it go up and down," Knox explained.

"I owned it."

Knox is one of several adult workers who claim that cryptocurrencies such as bitcoin provide them with a sense of protection and independence as banks, credit card companies, and payment processors tighten their prohibitions on adult content. With crypto, there is no middleman deciding which transactions are allowed.

Sex work is an umbrella phrase for anyone who engages in erotic labor, whether virtual or in person.

"The vast majority of sex work in the United States is legal. It's not treated decently, but it's still legal," noted Kristen DiAngelo, a Sacramento-based activist and sex worker who has worked in the sector for over four decades. "It's legal to strip...lawful it's to massage...legal it's to escort." In the United States, the only thing that is truly criminal is the honest exchange of sexual behavior for recompense, for money."

Some escorts, who charge anything from $1,700 per hour to $11,000 for a full 24-hour service, now state directly in their advertisements that they prefer to be paid in bitcoin or ethereum.

Performers on the popular subscription video site OnlyFans, many of whom operate completely online and have never seen their customers or fans in person, are also part of the sex work business.

Allie Rae, a 37-year-old mother of three boys, claims she went from making around $84,000 a year as an ICU nurse in Boston to $1.3 million as a result of her work on OnlyFans, which has over 130 million users.

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.

So DiAngelo did what other sex workers do: she "platform hopped," which means she moved her money to a different bank. She moved on to the next after they flagged and terminated her account. DiAngelo claims that after being denied down by a third bank, she turned solely to bitcoin for her online banking needs.

Platform hopping was cited by nearly every sex worker questioned for this piece. The Financial Crimes Enforcement Network, or FinCEN, has developed a set of anti-trafficking rules, and banks and major payment applications keep an eye out for activities deemed suspect by those criteria. Making regular financial payments — a hallmark of the sex work business – is one of those red signs.

"We will evolve, pivot, and move to other platforms," Knox added. "This is basically a circle of leaping through hoops."

PayPal, for example, booted her in 2014 due to a payment for her used socks that was substantial enough to be detected. Knox claims that neither she nor the buyer received a reimbursement. (PayPal informs CNBC that her account has been "closed owing to policy violations.")

Later that year, Coinbase cancelled her account and barred her from creating new ones. (According to CNBC, Coinbase's terms of service ban the use of its "commerce or retail services tied to adult content.")

"We're being penalized, not the traffickers, not the people who are genuinely abusing employees," said Alana Evans, an adult performer since the late 1990s. Evans is the current president of the Adult Performance Artists Guild, or APAG, a federally recognized union in the adult business that represents everyone from adult film set actors to content developers.

"They've assaulted our banks; our capacity to function like the rest of the world," DiAngelo added. "If you can't use the banking system, you don't exist."

Evans claims that once you've been in the industry and classified as an adult performer, it's nearly impossible to find work outside of it - even at a fast food restaurant.

"We've been labeled. "We are prejudiced against," said Evans, who is actively working to bring about change in her role as APAG's president. She claims to have spoken with Mastercard and other firms to address the issue, and she is lobbying members of Congress to add occupation to the list of protected title practices, which presently includes race, age, and religion.

Mastercard confirmed the meeting with Evans, adding it "welcomes conversation and varied opinions" on its policies and services.

Bitcoin is more than just a means of regaining financial independence for many sex workers; it's an industry standard.

The United States established a federal law in 2018 to combat internet sex trafficking. The Fight Online Sex Trafficking Act and the Stop Enabling Sex Traffickers Act, or FOSTA-SESTA, made it possible for web site owners to face criminal prosecution if their content facilitated trafficking.

"It meant that any online site, or any venue that does business online, that may possibly earn revenues for prostitution in any form could be indicted and sentenced to 25 years in prison," DiAngelo, a scholar and lecturer at the University of California, Davis, noted.

FOSTA-SESTA effectively ended Backpage, the once-dominant online marketplace for sex workers, and pushed Craigslist to terminate its personal ads.

However, critics claim that the overall effect of the regulation was to drive the trade underground. Workers lost the opportunity to pre-screen clients, which many in the business say resulted in an increase in street employment and violence.

It also made bitcoin a requirement for many escorts. Advertising is vital for attracting new business, and employees of popular escort directories such as Slixa and Eros told CNBC that these platforms encourage payment in cryptocurrencies within the United States. According to one industry veteran, typical adverts cost $480 in bitcoin for two weeks.

Eros did not react to a request for comment, but Slixa said in a written statement that it "does not advertise or have as advertisers'sex workers' as that term is traditionally defined," and that it accepts a variety of payment methods.

"I think crypto offers a way forward in certain aspects," said Mike Stabile, a spokesman for the Free Speech Coalition, an adult video trade group that campaigns 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.”

Chargebacks are a risk in the trade, in which a transaction is reversed when a consumer alleges they were illegally charged for a good or service they did not obtain. It's a mechanism meant to safeguard consumers, but many sex workers say it's being exploited in their business by clients who challenge a transaction for a product or service they've already received.

Consider OnlyFans. Some clients will challenge a transaction after they have already received customized video clips or photographs. According to OnlyFans' official policy, the artist, not the corporation, bears the cost of a chargeback. (Requests for comment from OnlyFans were not returned.)

Many models have gone to forums such as Reddit to share their stories, claiming that these suspected scammers may sometimes request a chargeback six months after receiving photos or videos.

Cryptocurrency transactions are final, making chargebacks impossible.

The adult business frequently leads technological advances online, and this has certainly been the case with cryptocurrency.

VIP Passion, a UK-based escort business, began accepting bitcoin in 2013. After Visa and Mastercard refused to accept payments for its "adult" area, Backpage attempted a similar foray into bitcoin, litecoin, and dogecoin two years later.

Visa stated at the time that the network's rules banned it from being "used for illicit activities," and that the business had a "long history of working with law enforcement to ensure the integrity of the payment system." Mastercard released a similar statement, stating that the company's regulations forbid its cards from being used for "illegal or brand-damaging activity."

In 2018, Pornhub, one of the world's most popular websites, began accepting the verge crypto currency. As litecoin developer Charlie Lee pointed out at the time, the porn industry is frequently a "leading indicator of technology acceptance," thus he was "pleased to see them opening up to cryptocurrencies."

When PayPal chose to stop paying out to over 100,000 Pornhub performers, the site offered tether (a stablecoin tethered to the price of the US dollar) as an alternate option. Pornhub went fully crypto in some regions in December 2020 after Mastercard and Visa severed connections with the network due to allegations of unlawful content running rampant on the porn site.

Mastercard said in a statement to CNBC that their decision was "based on an internal review that confirmed violations of our policies barring illicit content on their site." Visa did not return my call.

Nowadays, it's common to see pornographic websites take cryptocurrencies, and some even specialize in it.

Chaturbate and FanCentro accept digital tokens, and Stripchat, a live-streaming webcam platform, tells CNBC that 23 percent of its active models are now paid in a combination of cryptocurrencies such as bitcoin, ethereum, and USDC, a stablecoin tethered to the value of the US dollar. Customers can also leave tips, and the company claims that its greatest tip to date was $100,000 in cryptocurrency.

It also helps that recent developments in payment technology have made cryptocurrency transactions easier than before. The Lightning Network, for example, is a payments infrastructure based on bitcoin's basic layer that allows for near-instantaneous transactions.

"A Lightning-based OnlyFans could easily survive the kind of censorship they encountered in August," said Boaz Sobrado, a London-based fintech data researcher. "Political pressure and stigma can be applied to card firms, making it extremely difficult for otherwise legitimate enterprises such as OnlyFans to function."

"If you have a payment mechanism that is not subject to political demands, this entire vector is removed." And that is the case with the Lightning Network, which features low-cost payments, simple transactions, and is not easily censorable," Sobrado remarked.

Stripchat’s top crypto payouts

Some adult entertainment organizations have even used blockchain technology to create their own digital currency and platforms.

SpankChain is a cam-site built on the Ethereum blockchain that aims to make it easier for adult performers to get paid online safely. LiveStars, which is also built on ethereum, is an adult streaming platform and social network that promises greater privacy and security to users, as well as similar payment solutions that aim to make transactions faster and more profitable for the performer – which is significant for workers who are used to paying 40% to 50% commission fees on traditional platforms that use fiat payment rails.

CumRocket has its own NFT marketplace and token, which can be used to tip and communicate content artists, which Elon Musk appeared to support in two mysterious tweets last June.

Stabile notes that there are still impediments to widespread cryptocurrency adoption among sex workers.

For starters, both employees and customers face a high learning curve. Sex workers have developed and distributed online manuals on how to utilize cryptocurrency, but there is still a significant knowledge gap.

Some clients are also reluctant to spend their bitcoin on adult content.

"Generally, they use it as a store of value," Stabile explains. "It's a speculative asset."

Knox claims that many of her clients choose not to pay her with cryptocurrency.

"That's the roadblock we're facing right now." We can take it all day, but it won't truly take off for adoption until people start using it and paying us with it," Knox said.

Sex workers who accept cryptocurrency must also deal with unpredictable prices, which might reduce their earnings. Bitcoin, for example, is down more than 40% from its all-time high in November.

Evans tells CNBC that she persevered over the multi-year crypto cold that began in late 2017, when values plummeted.

"I literally had a paycheck worth one-tenth of what it was because I kept it," Knox revealed. "It's simply an up and down roller coaster." That is both the beauty and the curse of cryptocurrency."

Volatility can also have a positive impact.

Knox began taking cryptocurrencies in 2014 mostly for convenience, rather than any understanding of cryptocurrency as a long-term investment. Knox tells CNBC that in her early days, she would get two bitcoin in return for an hour-long Skype discussion. A single bitcoin is now valued roughly $40,000, and has reached as high as $69,000 in the past.

“I just kind of left it on the backburner and would collect it whenever people would pay me in it,” said Knox, who tells CNBC she still holds a good portion of her crypto stake. “I collected till about 2017 and then crypto went crazy. It was one of those things where I was like, ‘Oh, wow, this was an accidental great investment for me.’”

Beyond price volatility, trading in crypto often incurs extra fees.

“Buying the crypto to pay for [ads] was always fraught with all these hidden fees that these trading sites would be charging,” said San Francisco-based Maxine Doogan, who has been working as a prostitute for more than thirty years. 

Rather than utilizing a regular exchange like Coinbase, Doogan goes through a cumbersome process that entails identifying an intermediary through a trading site, depositing cash into that person's bank account, and then trusting that they would electronically transfer bitcoin into her crypto wallet. Some of these middlemen may accept gift cards. Others encourage sex workers to get a standard "vanilla" credit card and email them the numbers in the hopes that they would complete the trade.

DiAngelo claims that in the early days of cryptocurrency, she would deposit cash into bitcoin ATMs in liquor stores and petrol stations in order to purchase bitcoin. These machines charge commissions in addition to the transaction cost.

Another key issue is the set of rules that regulate bitcoin exchanges. Know-your-customer, or KYC, compliance is required by several services, including Coinbase. In fact, this implies linking an ID and a bank account to the platform, which is a no-go for many in the business.

As a result, some workers later discover that they are unable to cash out the cryptocurrency they have earned for goods or services delivered.

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 friends, family, or the government could technically track their steps with the right tools and crypto know-how.

Rae, on the other hand, remains certain that cryptocurrency is the future of the sex work business.

“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.”