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Crypto Increasingly Important For Pornhub & Others As Credit Cards Crack Down

Cryptocurrencies are increasingly important for Pornhub as Mastercard and Visa expand their crackdown on merchant services to the adult website.

Pornhub is one of the world’s most visited adult websites. According to data from Similar Web, the Pornhub site had around 2.54 billion visitors in January. The site’s business model has been severely disrupted, however, with the decision by payment intermediaries Mastercard and Visa to expand their ban on supplying merchant services.

Visa and Pornhub sued for facilitating child pornography

On Thursday, August 4th, Visa and Mastercard suspended card payments for advertising on Pornhub and its parent company Mindgeek. This is a new development targeting Pornhub’s advertising revenue – and an extention of earlier bans preventing Pornhub users from paying for premium subscriptions with credit cards.

The decision occurred in parallel to an ongoing lawsuit that claims Visa and Mindgeek are facilitating child pornography. A Federal Judge in California has denied Visa’s motion to dismiss a lawsuit filed by a woman who is accusing the company of knowingly facilitating the distribution of child pornography videos (in which she says she appears) on Pornhub and other sites owned by Mindgeek.

The plaintiff is suing both Mindgeek and Visa in a lawsuit that alleges that Mindgeek profited from earned ad revenue generated on the sexually explicit content that was recorded without her consent and posted on the company’s websites when she was 13. She alleges “Visa recognized MindGeek as an authorized merchant and processed payments to its websites including but not limited to Pornhub[.]” A quite glaring detail in the lawsuit was that the initial video was titled “13-Year Old Brunette Shows Off For the Camera”.

In 2014, upon first discovering the video when it had 400,000 views, the plaintiff impersonated her mother and contacted Mindgeek to inform them that the video qualified as child porn. Mindgeek acknowledged receiving the complaint but took weeks to take the video down. Before it was taken down the video was reuploaded to various other adult websites owned and operated by Mindgeek. One of these re-uploads garnered 2.7 million views and Mindgeek continued to earn revenue from the reuploads.

The law suit alleges that Visa knew MindGeek’s websites contained a substantial amount of child porn and that MindGeek failed to police its sites for such content.

Visa CEO and Chairman Al Kelly told CNBC that the court’s decision to not dismiss the lawsuit created uncertainty about the position of TrafficJunky, MindGeek’s advertising arm. Because of this Kelly said that Visa has taken the decision to suspend its services to TrafficJunky. During the suspension, Visa cards will not be able to be used to purchase advertising on any sites, including Pornhub or other MindGeek-affiliated sites.

Separately, Mastercard also told CNBC that it will also be taking similar actions to Visa – telling CNBC it will suspend activity associated with TrafficJunky and any other operations that may be “indirectly funding” Pornhub.

If Visa and Mastercard continue their latest suspension of services to Pornhub and Mindgeek, the company will have little choice aside from options like crypto and direct deposits to enable advertisers to buy space on its websites.

In a blog, Toronto-based sex worker and tech entrepreneur Isobel Andrews said “Cryptocurrency can be a sex worker’s best friend when it comes to paying for advertisements and collecting deposits, due to its immutable nature and relative privacy compared to bank transactions, credit cards, or payment processors like PayPal.”

Mastercard and Visa originally withdrew their services for premium subscriptions in 2020 after the New York Times reported that the Pornhub “monetizes child rapes, revenge pornography, spycam videos of women showering, racist and misogynist content, and footage of women being asphyxiated in plastic bags.”

The article titled “The Children of Pornhub” was written by opinion columnist Nicholas Kristof and directly called out the world’s major credit cards as being essentially complicit in the exploitation. “Call me a prude,” he said, “but I don’t see why search engines, banks, or credit card companies should bolster a company that monetizes sexual assaults on children or unconscious women. If PayPal can suspend cooperation with Pornhub, so can American Express, Mastercard and Visa.” The companies were quick to respond to Kristof’s critique and their decision followed a move made by Paypal in November 2019 to cut off its services to Pornhub.

Crypto only way to pay on Pornhub

After Paypal, Visa and Mastercard blocked user payments, Pornhub turned to cryptocurrencies as its payment solution for premium content, and will now likely do so for advertising placement as well. Cryptocurrencies operate on permissionless networks and are governed by decentralized communities over the internet. They are inherently censorship-resistant, anonymous or pseudo-anonymous and most importantly for Pornhub, cannot be arbitrarily turned off by any centralized entity.

In terms of technical innovation, the porn industry has often led the way in adopting new channels to market and the same is true of its approach to payment technologies. In 2018 Pornhub began accepting the privacy-focused cryptocurrency Verge (XVG) and Tron (TRX) as payment options for subscribers, and then in January 2020 addressed the issue of cryptocurrency price volatility by onboarding the US dollar stablecoin Tether (USDT) too. Today PornHub also accepts Bitcoin (BTC), Bitcoin Cash (BCH) Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Monero (XMR), NEM (XEM), ZCash (ZEC), Waves (WAVES), XRP (XRP), Binance coin (BNB), Dogecoin (DOGE), and another US dollar stablecoin USD-Coin (USDC). This takes the total number of crypto payment options on the platform to 16. Pornhub no longer accepts Dash (DASH) and PumaPay (PMA).

While cryptocurrencies are clearly more challenging to use for the average customer than a credit card – and are often more useful as stores of value – crypto payments remain an accessible alternative for demonized industries like adult content or cannabis to use when mainstream financial service providers are no longer an option. Interestingly, Google Ads had advised Brave New Coin that it has demonitized this page for advertising revenue merely for writing an article about Pornhub.

Paul Graham, the co-founder of startup accelerator Y Combinator, says crypto may benefit from credit companies taking a more discretionary approach to who they offer services to. He tweeted “Possible future scenario: Credit card companies become increasingly picky about who they’ll process transactions for, and this becomes the thing that tips the general public into using cryptocurrency in transactions, ultimately killing credit cards.”

Porrnhub currently processes payments through crypto payment service provider Probiller. The dropdown menu for payment methods on the Pornhub premium payment site currently only shows one option, ‘cryptocurrency’, and displays a message which states “Unfortunately, we are unable to accept credit cards at this moment.”

Users on cryptocurrency message boards reacted excitedly to Pornhub’s shift in payment policy. On the r/Cryptocurrency subreddit comments about the news included “This is good for adoption! Next up, Onlyfans.”

Pornhub tries to clean up its act

In reaction to the pressure from media and anti-trafficking groups, as well as the decision from Mastercard and Visa to suspend payments, Pornhub has removed millions of videos by “unverified people” on the website, which made up about 80% of the content on the platform.

While traffic to the site is still immense, it has dropped considerably since Pornhub’s issues with controlling child porn first became widely known. In November 2020, the month before the payment giants blocked merchant services, Pornhub had 3.31 billion visitors and was the 10th most visited website in the world. In the last month, Pornhub had 2.3 Billion visits and the website is now the 14th most visited site in the world.Prnhub Similar WebPornhub traffic remains high. Source Similar Web

How does Pornhub pay performers?

In an article published in VICE Motherboard adult performers like Allie Awesome explain that they expect their incomes to be slashed because of the action by credit card companies. Awesome says that few men pay for porn in the first place and the credit card ban is another reason for them not to. In 2018, when the only crypto payment options for Pornhub were XVG, Zencash, and Tron, Pornhub revealed that cryptocurrencies accounted for less than 1 percent of purchases made on the platform.

While men may be unwilling to give up their crypto to pay for adult content, performers appear ready to accept it. Pornhub’s parent company, Mindgeek, told The Block in March 2020, well before crypto payments became the only payment option, that 10 percent of Pornhub performers were already opting to receive payments in crypto.

Brazilian adult performer Gween Black has been using Pornhub to distribute content for three years. She told Vice in December, “I get paid in there monthly via USDT, it’s divided into different services: We get ad revenue for the free videos, Pornhub premium [is] based per view on videos on that system, fanclub (monthly subscription by users), Model hub sales (paid downloads and full videos), tips, custom video requests and live camming.”

Speaking to Brave New Coin, Black says revenue from Pornhub premium and video sales, which used to make up 25% of her monthly income, has fallen since the platform made the switch to crypto-only payments. In a fortunate turn of events, however, with non-verified videos now taken down from the website, Black says the views on her free videos have “skyrocketed”. Pornhub’s ad revenue for free videos model was unaffected by the Visa and Mastercard’s decision to stop processing payments from customers, offering performers like Black some reprieve from lost premium revenues.

Black tells BNC that she is also paid via USDT and bitcoin from other websites and also accepts crypto for tips and direct purchases from fans. “I have few fans that always buy my newest videos via bitcoin and it’s great! I believe this also helped them test how easy using crypto is.”

Black, who is from Brazil, says being able to receive payments in appreciating assets like Bitcoin and stable US dollars has helped protect her family and her from an inflating local currency and political chaos in her country.

The platform tries to defend itself

Pornhub’s switch to pure-crypto payments appears to be only temporary. The platform is quickly working towards cleaning up its act and addressing its content moderation issues in hopes that Mastercard and Visa will return to its platform. In response to the New York Times article, Pornhub has announced that it will only be allowing uploads from verified content creators, blocking downloads and setting up barriers to prevent content removed from the platform from returning, expanding moderation on the site, a new partnership with the National Center for Missing & Exploited Children (NCMEC) and a trusted flagger program with a number of major non-profits. One of the biggest changes to prevent non-consensual content from the platform will be the roll-out of biometric technology to verify the identity of users uploading content onto the site.

The Canadian Parliament Ethics commission has also questioned executives from MindGeek, on its moderation practices. Members of Parliament asked how the company was handling the reports of unlawful material on the site and why changes hadn’t happened sooner. MP Shannon Snubbs asked, “Why did Mindgeek wait until December 2020, after global condemnation and threats from payment processors, to take these actions?". Mindgeek Chief Operating Officer, Marmostein Tassillo, responded saying. "We had human moderation on our sites when it was a word that didn’t exist… These were things that we started. We weren’t public about it but these are things we did since the beginning,” Tassillo says moderation on the platform has been in constant evolution since the company was launched in 2008. At one point while testifying Tasillo said “I truly believe, in my heart of hearts, that we are the safest adult platform in the world right now.”

The grilling from Canadian MPs came after Serena Fleites, one of the child pornography victims cited in the December New York Times opinion piece, testified before parliament that Pornhub took more than a week to act on the content she reported as abusive.

The company also went on the offensive in a blog post released soon after the December 2020 decisions from payment processors to suspend payments. In the post, the company claims that it is being unfairly targeted for being a porn producer. “It is clear that Pornhub is being targeted not because of our policies and how we compare to our peers, but because we are an adult content platform,” the service writes. “These are the same forces that have spent 50 years demonizing Playboy, the National Endowment for the Arts, sex education, LGBTQ rights, women’s rights, and even the American Library Association. Today, it happens to be Pornhub.”


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