Yesterday, OnlyFans, an online subscription platform primarily used by performers selling adult sexual content, announced it won’t be doing that anymore. Starting on Oct. 1, OnlyFans will prohibit any graphic pornographic material, though it will continue to allow nudity.
The decision seems insane on the face of it: OnlyFans is unilaterally turning its back on a business that has helped it grow immensely and rapidly. The company’s financials are apparently bananas, with a company pitch deck from March projecting $1.2 billion in net revenue for 2021.
That could have made tiny OnlyFans more profitable than Tesla, but those numbers are out the window now. Though nominally the platform is “pivoting” towards non-sex content like cooking lessons, yesterday’s announcement almost certainly amounts to simply abandoning a giant, cash-spewing firehose.
They’re also screwing (pun intended) a lot of sex workers: In a statement, the Adult Performance Artists Guild said that “most content creators on Onlyfans are … adult performers who make their entire living off of the platform.” The Guild predicted the change would cause a “crisis” of “financial despair and destruction.”
The explanation for this bizarre behavior turns out to be both fairly simple and deeply disturbing. As OnlyFans spelled out in a statement to the media, “These changes are to comply with the requests of our banking partners and payout providers.”
One of these, according to the Daily Beast, is Mastercard, which announced in April that it would impose and police content moderation policies for any adult businesses it serviced – with an implied threat to cut off those that didn’t or couldn’t comply. Banks and processors see risk because “the pornography industry is high risk for money laundering, human exploitation and illicit activities,” as one Suspicious Activity Report unearthed by Forensic News put it.
OnlyFans has also struggled to attract outside investment despite its big profits, due in part to venture capital policies barring investment in the adult industry out of fear of liability. But the looming threat of a payments cutoff is likely just as big a headwind to the OnlyFans pitch.
This isn’t a new or isolated phenomena. Pornhub has been dropped by Visa, Mastercard and PayPal. Individual adult performers have had their bank accounts closed thanks to a pressure campaign by the U.S. Department of Justice. In 2018, Patreon cracked down on adult content partly under pressure from credit card processors. In fact, a big reason OnlyFans has grown was that it was one of the few places online where performers could still get paid through conventional channels.
Now, to take a step back, there are some good reasons to wish OnlyFans didn’t exist, or at least to be very nervous about it. It has been a powerful tool for a large number of professional sex workers, but it does genuinely create risks, particularly for more marginalized users. Just as Facebook and YouTube have struggled to police harmful, abusive or false content, OnlyFans would likely have faced a daunting task in detecting and preventing human trafficking and child sexual abuse on its platform. Above all, it would seem very difficult to figure out if someone is being coerced to perform.
(Facebook, for the record, is far more widely used for sharing child sexual material than any porn site.)
But even if you’re deeply worried about this, that this shutdown is being forced by banks and credit card companies should be nothing to celebrate. Adult content, after all, is protected by the Constitution of the United States, where both Visa and Mastercard are headquartered. In withdrawing their services, they’re essentially acting as censors, without any democratic, legislative or judicial due process.
I use the word “censor” advisedly here, because this isn’t a unilateral decision by the banks: Along with anti-porn pressure groups, the U.S. government itself has helped coerce banks to adopt anti-porn policies. The clearest evidence we have of this is an Obama-era Department of Justice program called “Operation Choke Point” that pressured banks to drop clients in industries from porn to payday lending to firearms.
Bankers, to their credit, didn’t go along with this entirely quietly. The program, according to critics in the financial industry, forced bankers to act like judges and put disproportionate strain on smaller banks with fewer compliance staff. The program was formally ended in 2017 (presumably mostly thanks to the Trump administration’s deep ties to the payday lending industry), but it seems to have convinced banks that the risk of future similar actions is still live.
This politicization of the payments system seems likely to get increasingly heavy-handed, simply because it’s a lever that’s easy for the government to pull. It’s right there on the tin: The banks and processors are a single, easily pressured “choke point” with massive potential to influence the practices of, well, pretty much anyone the government lays its eyes on.
That reality has helped make cryptocurrency an attractive alternative for some adult businesses. Pornhub, believe it or not, offers tether on Tron as a payout method for its contributors. More broadly, the politicization of the payments system drives home the absolute social necessity of a neutral and ungoverned payments layer, such as cryptocurrency, as the digital world grows in importance.
It’s a well-worn argument, but one that bears repeating: Even if you happen to agree with agendas like limiting porn or guns or extortionate payday loans, you must consider the end game of banking censorship. The same expedient logic that makes choking out porn platforms seem sensible could, in even more malicious hands, be applied to abortion providers or political dissidents or any number of even more obviously Orwellian targets.
A final bitter pill is that OnlyFans is almost certainly doomed to fail in its shift away from sex. It may find takers for subscription cooking lessons and home decorating tips, but it will be a much smaller and less profitable business. The obvious parallel here is to Tumblr, a pioneering social image site whose users shared a lot of porn as part of a larger subversive culture, but banned porn after being acquired by Yahoo! Predictably enough, Tumblr became a ghost town.
Investors almost certainly know the story of Tumblr, and exactly which direction OnlyFans’ revenue is going to be heading. So now they’ll have an entirely different reason not to invest.