Bitcoin has become a lifeline for sex workers, like this former nurse who made $1.3 million last year

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. 

Sex work is an umbrella term that includes anyone who engages in some form of erotic labor, whether virtual or in person.

“The majority of sex work in the U.S. is legal. It’s not dealt with fairly, but it’s still legal,” explained Kristen DiAngelo, an activist and Sacramento-based sex worker who has spent over four decades in the industry. “Stripping is legal…massage is legal…escorting is legal. The only thing that’s really illegal in the U.S. is the honest exchange of sexual activity for remuneration, for money.”

Some escorts – who charge anywhere from $1,700 an hour to $11,000 for a full 24 hours – now explicitly say in their ads that they prefer to be paid in bitcoin or ethereum.

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. 

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,” 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 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. 

Stabile warns there are still barriers to mass crypto adoption among sex workers. 

For one, there’s a steep learning curve for both workers and customers. Sex workers have written and circulated guides online on how to use crypto, but a sizable knowledge gap remains.

It is also difficult to get some customers to spend their bitcoin on adult content. 

“They generally use it as a store of value,” says Stabile. “It’s a speculative currency.”

Knox says often clients choose not to pay her in crypto. 

“That’s the hurdle that we’re at right now. We can take it all day long, but until people start using it and start paying us with it, it’s not going to really take off for adoption,” said Knox. 

Sex workers who do accept crypto also have to contend with volatile prices, which can cut into their earnings. For instance, bitcoin is down more than 40% from its November all-time high.

Evans tells CNBC she stuck it out through the multi-year crypto winter that began in late 2017, when prices plunged.

“I literally had a paycheck that was worth one-tenth of what it was, because I held on to it,” explained Knox. “It’s just an up-and-down kind of roller coaster. That’s the beauty and the pain of crypto.”

That volatility can create upside, too.

When Knox began accepting cryptocurrency in 2014, it was mainly for convenience, rather than any sense of crypto as a long-term investment. In her early days, Knox tells CNBC she would get two bitcoin in exchange for an hour-long Skype session. A single bitcoin is now worth around $40,000, and has been as high as $69,000.

“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. 

Instead of using a traditional exchange like Coinbase, Doogan instead goes through a convoluted process that involves finding an intermediary via a trading site, and then depositing cash into that person’s bank account, trusting that they will then electronically transfer bitcoin into her crypto wallet. Some of these intermediaries will accept gift cards. Others ask sex workers to buy a regular “vanilla” credit card and send them the numbers, in hopes that they’ll follow through on the trade.

DiAngelo says that in the early days of crypto, she would use bitcoin ATMs at liquor stores and gas stations to deposit cash to buy bitcoin. These machines charge commissions above and beyond the cost of the transaction.

Another major problem relates to the rules that govern cryptocurrency exchanges. Many platforms like Coinbase require know-your-customer, or KYC compliance. In practice, that means having to connect an ID and bank account to the platform – a non-starter for many working in the industry. 

Because of this, some workers later find they can’t cash out the crypto they have earned for products or services rendered.

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.”