Sex Workers Have Serious Issues With a Crypto-Powered ‘Uber for Escorts’

Leigh Cuen
Jul 16, 2018 at 08:00 UTC
Updated Jul 17, 2018 at 03:47 UTC
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“Too pimp-like and not safe to use.”

That’s how one sex worker, who spoke on condition of anonymity, described the cryptocurrency platform PinkDate, for which she was invited to test the service but refused.

Describing itself as the “Uber of escorting,” PinkDate is one of several sex industry startups launching a crypto-fueled booking app funded by an initial coin offering (ICO). The platform, currently in a closed beta, aims to match sex workers with clients (just as Uber does for drivers and passengers). Except instead of credit cards, clients would pay for services with bitcoin or monero.

The team has raised more than $1 million through the sale, and a dozen escorts are registered to use the app, according to Sarah Stevens, PinkDate’s former president.

However, experts familiar with the complexities of sex work identified a litany of issues unique to this project, from exploitative fees to a lack of sex worker representation in the project’s leadership.

Not least of all, PinkDate is asking for a lot of trust.

First, the project’s founders are anonymous and their locations are unknown.

A PinkDate spokesman who gave only a first name, Roger, told CoinDesk, “PinkDate is not registered as a legal entity. We are extra-jurisdictional and operate anonymously.”

But while that setup may seem to be in line with the cypherpunk ethos that gave rise to cryptocurrency, PinkDate also requires the escorts using its platform to have active Twitter accounts and hand over copies of their government-issued ID.

This arguably creates an asymmetric relationship – the sex workers, who risk arrest or social ostracism if they were to be outed, are being asked to trust operators whom they know nothing about.

Screening and compliance

Another way in which escorts might have to trust PinkDate’s shadowy founders is with client screening to weed out abusive customers.

While the platform will also ask clients to provide identification, sex workers worry PinkDate isn’t devoting enough resources to cross-reference these IDs with industry blacklist databases.

Roger said all client information will be provided to the escort as well, although escorts felt this assurance was dubious based on a lack of responsiveness related to product launch delays and technical errors.

Another escort, who also requested anonymity, said the team has not been communicative with sex workers who signed up to use the app.

“They clearly don’t care about the girls on the site. None of us got emails explaining what’s going on,” she said, referring to such delays.

Asked about concerns that a blacklisted or abusive client could use the service, Roger said, “We are going to finalize an arrangement with a commercial database that specifically deals with adult-oriented projects.” But he provided no further specifics.

All this might be acceptable to some in the profession if PinkDate still had a sex worker on staff, but Stevens was the only one and PinkDate publicly severed ties with her last month.

In a statement, PinkDate cited SETA/FOSTA, a U.S. law criminalizing internet services or users that “enable” prostitution, as its reason for parting ways with Stevens.

However, Stevens told CoinDesk part of the reason behind the split was her concerns about PinkDate’s business model.

One such concern is compliance with financial regulations. Unlike the utility token offered by SpankChain, which will be used strictly as that platform’s internal currency for tipping erotic performers, PinkDate’s site explicitly says the token it’s selling in the ICO just represents equity in the company, for which holders will receive dividends. (Within the PinkDate ecosystem, clients pay escorts in bitcoin or monero, and the platform takes a cut.)

But while labeling your ICO a share offering is usually considered erring on the side of caution in a regulatory environment where few jurisdictions recognize utility tokens as a legitimate category, PinkDate is unabashedly pushing the envelope.

“They do zero know-your-customer and anti-money laundering [checks],” Stevens said, referring to the screening of token-buyers. “Since they’re not a legal entity, this is not even a security token offering.”

Roger acknowledged that it does not vet token buyers. “Anyone can buy PinkDate Token Shares. There is no screening process,” he told CoinDesk.

He added:

“We are selling unregistered securities for a company that’s building a global escorting platform.”

Even beyond its plans for unlawful operations in North America, PinkDate’s escort onboarding process would fail compliance standards in many jurisdictions around the world where prostitution is legalized since most require routine health screenings and PinkDate does not.

Robin Attig, CEO of the rival crypto startup Lovr, told CoinDesk that escorting platforms which don’t require medical checkups and sufficient client screening are “highly illegal” in jurisdictions where escorting itself is legal, such as Germany, where his firm is based.

Revenue models

Another concern expressed by sex workers is that PinkDate would take a large cut of escorts’ earnings on the platform while offering them little in return in the way of support services.

PinkDate will process bitcoin and monero payments from clients, then charge individual escorts up to 20 percent.

By contrast, Lovr doesn’t charge escorts for sessions booked through its platform, which also processes cryptocurrency payments. Instead, it will earn revenue through advertising and possibly fiat exchange services through a German bank. Escorts will be able to freely cash out crypto if they choose.

“That’s just fair,” Attig said. “We want to make it possible to have peer-to-peer payments. If we take a lot from their [earnings], we’re a middleman again.”

SpankChain charges erotic performers 5 percent of their earnings on its platform, a much lower rate, and it offers legal support and marketing campaigns.

Outside of crypto and blockchain projects, many centralized escorting platforms charge as much as 40 percent of an escort’s earnings. In exchange, these companies often offer marketing opportunities like photo shoots, advertising campaigns to attract new clients, and sometimes even transportation, safe locations to work, or legal support.

PinkDate, by contrast, is currently vague on the incentives it will provide.

“We are always open to ideas on what escorts would like as far as additional benefits or services that adds value to their business,” Roger told CoinDesk. “This could include photo shoots, launch parties or other events, etc; part of an initial marketing ramp-up that will be required.”

But Stevens said she isn’t confident the PinkDate team will be able to deliver on any escort support services. She even went so far as to allege the application itself still doesn’t work properly.

“They just wanted to make money off the backs of escorts … making promises they can’t keep,” Stevens said.

The ICO is set to conclude this month, but it’s unclear when the platform will launch.

“We have already received many applications to start using PinkDate from both Canada and the U.S.,” Roger told CoinDesk.

Sex worker image via Shutterstock

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