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Backpage Goes Bitcoin-Only

The largest English-speaking escort board on the web, which generates over $100 Million revenue annually, was recently banned from accepting Visa and Mastercard.

Visa card cut all ties with the number two online classified ads website, Backpage, on July 1. American Express had previously cut ties with the service, and on Thursday  Mastercard followed suit. This leaves Bitcoin, Litecoin, and Dogecoin as the only working payment options to purchase any ads or services through Backpage.

In 2013, the AIM Group, a leading advertising consultancy, looked into the figures for online sex workers. “Backpage’s monthly revenue from online escort and body-rub advertising already exceeds the Craigslist estimates from three years ago.” The AIM group report found.

The extremely popular board has become synonymous with prostitution, following Craigslist shutting down its profitable adult services section in 2010. The resulting migration of escorts and other adult service advertisers to Backpage has kept it earning strongly ever since.

“Most of the $45 million generated from June 2012 through May — 82.3 percent — has been generated by, a general classifieds site that has succeeded Craigslist as the nation’s leading publisher of online prostitution advertising.”
— – AIM Group

That is until Sheriff Tom Dart of Cook County, Illinois decided to address the site’s main funding options. Dart sent letters to both credit card companies alleging that Backpage is used for sex trafficking and prostitution, urging them to remove their support.

Dart told CNN that his department “made over 800 arrests related to the site, including more than 50 sex-trafficking and prostitution busts and a juvenile sex trafficking arrest last month."

“The website now does approximately $9 million a month in revenue,” Cook County Sheriff’s Department spokesman Ben Breit told the Huffington Post.

“That figure is a very conservative estimate. Our researchers put the number at about 1.4 million adult ads published in the U.S., in April alone."
— – Cook County Sheriff’s Department

Mastercard and Visa both stopped all dealings with Backpage soon afterward, each making a statement that they will continue to work with law enforcement, and avoid “brand-damaging activities.”

It was also Sheriff Dart who sued Craigslist in 2009 for advertising similar services, which is most likely to the reason Craigslist shut down its adult services section the following year.

Presidential candidate Marco Rubio even tweeted about the move by Visa and Mastercard this week, likening prostitution to slavery:  “Happy to see @Visa  and @MasterCard  ban the use of their cards for modern day #slavery on #Backpage”

However, many doubt that there is any actual sex trafficking or slavery listed on Backpage at all. Reason magazine posted a scathing rebuttal to the news stating that “Dart makes little distinction between ‘sex trafficking’—generally understood to mean forced or coerced commercial sexual activity—and the much more common phenomenon of consensual prostitution.” It goes on to liken the modern-day pimp to the mythical chupacabra, with the vast majority of sex workers today being free agents, never having spoken to a pimp or agency at all.

Backpage General counsel Liz McDougall responded to the Huffington Post on this subject as well, pointing out that they worked with law enforcement to deter sex trafficking in a way that was far more effective than this new approach.

“We stand firm in our belief that a domestic website that combats child sex trafficking domestically in collaboration with law enforcement is far more beneficial to victims than driving the problem to underground and offshore sites. And we remain committed to effective measures of prevention and successful prosecution of this heinous crime."
— – Backpage

One unintended consequence to this takedown was immediately apparent in countries where prostitution is legal, such as Australia. Since Backpage is a global website, and Visa and Mastercard are not bound to US prostitution laws in foreign countries, legal Australian sex workers are understandably upset. They have been cut off from their main funding source, due to the actions taken by an Illinois sheriff. Many are calling this an overreach of power, but ultimately Visa and Mastercard are private companies and have the final say about prostitution harming their brands.

While some in law enforcement may see this as a big victory, they weren’t alone, although for very different reasons. The news was cause for celebration across the Bitcoin community too. The possibility of $9 Million of new business each month using the cryptocurrency got many blogs, tweets, and websites across the industry cheering and welcoming sex workers into the fold. Some even went so far as to create detailed presentations and new websites aimed at the adult service providers, in order to show them how to use bitcoin quickly.

Backpage does have competition these workers can move to, however. Although Backpage is far out ahead of the pack in terms of traffic, there are at least 3 other websites that allow the same kind of ad to be placed on them, and they all currently accept credit cards.

2013 AIM Group findings

While has since been taken down by the FBI for money laundering and prostitution, the other three sites are still running and none of them accept bitcoin for ads, despite some of their escorts already accepting bitcoin for services directly.

Additionally, Backpage has also added a mail-in option for payments this week, accepting checks and money orders. Pre-paid American Express cards that work like gift vouchers still work as well, at least in some countries. There clearly are other options for sex workers, but none are as private, profitable, nor long-lasting as accepting bitcoin.

While the privacy-enhancing features of Bitcoin should prove attractive to people in this industry, once they have conquered the learning curve, it has yet to be seen if the bulk of the escort industry is going to embrace cryptocurrency.


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