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> One day last year we get a notice from our bank telling us that we were deemed "high risk" and they were closing our commercial accounts. For months we tried

• gspencley 4y ago
  They never said. Not chargebacks though because we never sold directly to customers. We promoted affiliate programs and would get paid by our sponsors (electronically or by mailing us physical checks).
  • codetrotter 4y ago
    The adult industry should adopt Bitcoin
    • hanklazard 4y ago
      yes, and with an e-cash layer: https://github.com/cashubtc/cashu https://github.com/cashubtc/cashu
    • gspencley 4y ago
      I can't pay my accountant, utility bills or my property taxes with Bitcoin though. At some point that money needs to be converted to fiat which means I still need a commercial account. And to maintain a commercial account in current year, "Know Your Customer" regulations force the bank to ask you an insane amount of details about your business activities and cash flow. Even if they didn't, bringing in $120k / year into the account from a crypto exchange would raise a lot of questions and that, in and of itself, would likely get branded "high risk" by the bank since there is a perception that 100% of Bitcoin activity is money laundering.
      • im3w1l 4y ago
        You could have an old school exchange where people go in person to shout bids and offers and settle with briefcases full of $100 bills. Those can be used to pay accountants, utility bills and property taxes.
        • Rufbdbskrufb473 4y ago
          It you live in a big city, it's easy enough to find someone to meet in person and exchange crypto for $1-10k cash a few % below the market rate. Some will even pay above market rate if you can do $100k+.
          • ed_elliott_asc 4y ago
            Facilitating (likely) money laundering isn’t really a great idea
          • JumpCrisscross 4y ago
            > it's easy enough to find someone to meet in person and exchange crypto for $1-10k cash a few % below the market rate. Some will even pay above market rate if you can do $100k+ In case anyone is wondering, this is money laundering, and if you wind up with the wrong person on the other side, getting arrested and charged is among the better outcomes.
            • FateOfNations 4y ago
              At least with respect to US federal money laundering laws (18 USC 1956, et seq.), there needs to be “specified unlawful activity”, as defined, involved for it to be money laundering. Running a legal porn site isn’t illegal.
              • codetrotter 4y ago
                I think what they are saying is that the counter-party in the in-person BTC/USD trade could have gotten those USD in an illegitimate way, and that by accepting those USD in exchange for BTC you’d be partaking in money laundering.
      • MuffinFlavored 4y ago
        > I can't pay my accountant, utility bills or my property taxes with Bitcoin though. If you get Bitcoin in, and then you convert it to USD, why not?
        • 16bitvoid 4y ago
          > At some point that money needs to be converted to fiat which means I still need a commercial account.
        • jeremyjh 4y ago
          The answer to this question is in the message you are replying to. At the end of the day there is still a bank with KYC requirements.
        • Sohcahtoa82 4y ago
          And where are those USD going to be stored?
        • deleted 4y ago
          [deleted]
      • DANmode 4y ago
        > there is a perception that 100% of Bitcoin activity is money laundering. Let us know what bank you're using so we can avoid it.
    • the_af 4y ago
      Bitcoin is probably a barrier to entry, meaning the "users" in this industry don't all know or understand how to use Bitcoin, and so this would mean losing a portion of their less tech savvy userbase. On the other hand, almost everyone (who is online and able to purchase things) knows how to use a credit card.
      • codetrotter 4y ago
        He said his customers are advertisers, not the people visiting his site > We promoted affiliate programs and would get paid by our sponsors
        • the_af 4y ago
          Ah, missed that. It changes everything, I stand corrected.
      • yellowapple 4y ago
        Losing a portion of the less tech savvy userbase is a strict improvement over losing the entirety of the userbase due to an inability to take payments at all.
        • the_af 4y ago
          Like I answered to a sibling comment, I mistook who his customers were: advertisers! If we are talking about advertisers, switching to crypto makes way more sense.
          • JumpCrisscross 4y ago
            > If we are talking about advertisers, switching to crypto makes way more sense I would have assumed the opposite. Ad buyers aren’t idealogues.
            • the_af 4y ago
              No, but they are pragmatic. I understand this is simply a way to sidestep payment problems related to anti-porn regulations, not an ideological "crypto freedom" thing. The advertisers are aware of what business the website is in, they want to advertise there, but the owner's bank closed his account.
    • mrits 4y ago
      I'd like to see the overlap of people that use bitcoin as a currency and pay for adult material on the internet.
      • codetrotter 4y ago
        His customers are the advertisers > We promoted affiliate programs and would get paid by our sponsors
        • mrits 4y ago
          Are you under the impression that advertisers get paid in bitcoin? There is no need for crypto if you just want to pay exchange fees.
    • devrand 4y ago
      In what way would that help? At the end of the day the company will need to pay taxes and employees will need to be paid (who in turn also need to pay taxes on that). That basically forces conversion to fiat via a bank account that they cannot obtain. All crypto has done is add an extra layer of complexity on top of the fundamental problem.
      • MikePlacid 4y ago
        > All crypto has done is add an extra layer of complexity on top of the fundamental problem. In the West - maybe, but check pornolab.net - they are asking for crypto donations right now. They can’t get anything else (but for a different reason) but they can make use of crypto.
    • ldoughty 4y ago
      Yes, adopt a crypto currency that one day is worth 45k, and a month later it's worth 30k, and a month after that it's worth 20k, and 2-3 months later it's 15k (that's what happened in the second half of 2022) You would need to hire a crypto savvy trader to distribute your risks over several currencies and exchanges.. and when you reaches $250,000 in valuation (which hopefully the employee tells you it is), you need to hire a second to make sure it all doesn't disappear in an uninsured irretrievable early retirement package for the trader. You basically have to set up a crypto business along with your actual business idea... Compared to traditional small business where you can hire an accountant to do payroll for just a few hours, and you have next to no risk your accountant can easily run off with millions of your dollars that you can't get back.
    • deleted 4y ago
      [deleted]
    • yellowapple 4y ago
      Yep. The ability and willingness of banks and payment processors to play morality police is a perfect case study in the utility of cryptocurrencies. They ain't perfect, but "inconvenient to turn this payment into dollars to pay bills" is a considerable improvement over "no payment at all", and the sibling comments poo-pooing over said inconvenience are missing the point and letting perfect be the enemy of good.
  • LawTalkingGuy 4y ago
    Could you have spun off the placement part of the business into a separate identity (which didn't bill itself as "adult") and kept the profits there?
• cowsup 4y ago
  In August of 2022, Visa was facing a lawsuit that alleged they were assisting PornHub of profiting off of child porn [0]. This likely caused the card companies, as well as affiliated banks, to re-evaluate their customers and get any adult site off, including the user at the top of this comment thread. Was his site allowing user-generated content? No. Was he at risk of facilitating child porn? Also no. Would the banks and card companies be willing to research that and make exceptions for a single account? Unlikely. [0] https://www.pcmag.com/news/visa-to-stop-processing-payments-for-pornhubs-advertising-arm https://www.pcmag.com/news/visa-to-stop-processing-payments-...
  • gspencley 4y ago
    Ironically, MindGeek (also a Canadian company and the parent company of PornHub) is still in business. One of our former sponsors banks with a credit union in Quebec and that very Credit Union turned us down too. Our takeaway was that you'll get an exception if you're doing millions in transactions and are a huge corporation, but the "little guys" can GTFO.
    • sdwvit 4y ago
      They sold the business last year I believe, may be wrong
    • retrac 4y ago
      > a credit union in Quebec and that very Credit Union turned us down too Perhaps somewhat impractical, but a quick skim of Ontario's credit union laws does not seem to preclude a credit union operated by a trade association of pornographers, or similar, to provide personal and commercial banking services to that community.
    • azinman2 4y ago
      I'm surprised given Quebec is one of the porn capitals of the world. Given how much money flows through you'd think at this point the porn producers would just form their own credit union!
      • 4y ago
• ThatGeoGuy 4y ago
  It's not chargebacks specifically, but you can find a handful of articles and websites detailing how MasterCard and Visa in particular deciding that they will not allow certain kinds of adult content. They flex this by putting leverage on the banks to not support this either, as they could lose the ability to work with Visa or Mastercard if they start doing banking outside their TOS. There are some reasons why this could be a good thing - pornography is an industry rife with problems of trafficking, abuse, etc. and denying funding of that kind of behaviour is not without reason. But this tends to spill over to just about everything that /isn't/ abusive as well, which leads to adult sites and the like not being able to secure their own funding or get support from banks.
  • gspencley 4y ago
    > pornography is an industry rife with problems of trafficking, abuse, etc. In my experience in the industry that is perception, not reality. There were a few cases to make the news cycle, like the Girls Do Porn lawsuit and the MindGeek/PornHub controversy with user-submitted content. But precisely because of public perception the adult industry tends to be pretty good at self-regulating in my experience and opinion. I remember getting an email from a sponsor of mine several years ago telling us that their content could in no way be associated with text that includes "drunk / drinking / intoxicated" etc. and they told us that we had to change the copy on the pages that featured their content. Consent is a huge topic and way more nuanced than most people assume. The finance industry on the other hand? We're talking about institutions that fund weapons dealers and warlords. With global investments from rights-infringing countries. Not to mention the white collar crime and corruption that comes out of that industry. Public perception of the adult industry being "rife with problems" stems from the taboo and ideology IMO. Nothing is without problems, but it's all relative and some industries do have it worse than others.
    • the_af 4y ago
      What you say matches my suspicions. In the end, the problem is that sex is taboo -- coincidentally the same thing that makes many porn websites "tick" -- and the conservative sectors of society will find a way to be alarmed about it. So getting alarmed about trafficking in porn to me seems like getting alarmed about cars being used to abduct kids and therefore trying to ban cars because of this.
• cobertos 4y ago
  High risk business, other businesses are classified as the same when you try to sign up for a merchant bank account, like investment services and marijuana companies.
• phendrenad2 4y ago
  No one has put forth a satisfactory explanation for this, in my humble opinion. There's lots of speculation that it has to do with chargebacks, or lawsuits over revenge porn or something. But nothing more than speculation.
• WorldMaker 4y ago
  High Risk of annoying "interest group" complaints. There's a lot of evidence about how much just a couple of loony religious groups send thousands of complaints each year to Visa/Mastercard/etc about every company they don't like, and that in turn affects Visa/Mastercard/et al's pressure/relationship with banks. You'd think that annoying complaints from a minority of self-righteous people wouldn't have so much power in banking, but they seem to get listened to time and again.