What Does ‘Operation Choke Point 2.0’ Mean for the Adult Industry? 

For many in the adult industry, including porn production companies, OnlyFans creators, and the broader sectors of sex work and sex tech, finding banks that will support businesses has become increasingly challenging. For many, it has impacted finding loans and investment opportunities, with many denying their applications for financial help. And even blocking many creators and service providers from being paid, opening or keeping a bank account or accessing their money. 

That is why the rise of alternative payments, such as cryptocurrency, has hugely impacted the adult industry. Allowing companies within the industry to bypass these harsh regulations and make money. For content creators and sex workers, this has been a lifesaver in ensuring they are paid for their services. 

However, the rise of the new Biden administration regulations looking to tackle crypto and crack down on banking regulations in what has been labeled Operation ChokePoint 2.0 has caused many in the industry to worry about how this will impact business. 

In this article, Adult Site Broker will be looking at the history of Operation Chokepoint and how these new regulations may impact the adult industry as a whole. 

What was Operation Choke Point? 

Under the Democrats, Operation Choke Point was initiated by the US Department of Justice in 2013 to investigate banks and payment processors deemed high-risk and potentially involved in fraudulent activity.  While it started with good intentions, to crack down on fraudulent purchases and scams, the original program was criticized for unfairly targeting legitimate businesses, such as gun dealers and the adult entertainment industry, and putting pressure on banks to cut off their access to financial services. In 2017, the Trump administration officially ended the program, citing concerns about government overreach and the potential harm to lawful businesses. 

By this time, it is fair to say that its impact has been long-lasting, with banks and online payment methods, such as Paypal and Venmo, exerting pressure on the adult industry to stop the rise of porn and entertainment. For example, the 2021 changes to OnlyFans policies to try to ban adult content on the site (ironic because the site was founded in 2016 to capitalize on adult content creators using social media to sell their content.) Although this policy change was reversed within days of the policy change, when asked about why they had changed the policy in the first place, Tim Stokley, the founder, cited “the banks” as the reason. 

Because of this, many ‘high-risk’ brands in the adult industry have turned to alternative payment options, including cryptocurrency. But in 2023, a new surge in crackdowns on banks and crypto has been cited as Operation Choke Point 2.0. But what is it?  

What is Operation Choke Point 2.0? 

So, what is Operation Choke Point 2.0? Earlier this year, the Trump-era rule that would allow fair access to banks for all was halted under the Biden administration. Since then, there has been a crackdown by the Democrats and Federal Regulatory offices on allowing banks to offer financial support to cryptocurrencies. This occurred after the fall of the crypto exchange FTX and the controversial scams. But while it may be trying to frame itself as trying to crack down on fraud and con artists, many see this new regulatory scrutiny as a war on crypto to push them out of the financial system for good. 

Although it claims to have revised its initiatives (focusing on illegal online marketplaces, fraudsters, and bad actors while ensuring compliance with existing regulations) and objectives, many high-risk industries need more clarification about what this could mean. 

Criticism arises under issues of due process, anti-discrimination laws, and the appropriate allocation of regulatory authority as it continues to focus on ‘high-risk’ businesses, including the adult entertainment industry. By cutting off crypto companies from accessing banking, they are stopping them from running by denying them the ability to pay staff, and to manage operations. 

But what could this mean for brands and creators within the adult entertainment industry? Let’s find out in the next section. 

How does this impact the adult entertainment industry? 

Under the original Operation Choke Point, in 2014, many adult industry stars claimed that their bank accounts under Metro Bank were shut down unfairly. This has happened again more recently in 2022 with Wells Fargo bank, and many who use alternative payments like PayPal and Venmo have also blocked their accounts. Many have lost their earnings or are barred from applying for payouts and accessing their hard-earned money. The FSC has reported that 40% of adult industry workers have suffered banking discrimination and been denied access to their bank accounts. 

This discrimination and the stigma surrounding adult content creators have real ramifications on people’s lives. With creators losing their jobs, denied loans, and even turned away by realtors. 

For many, this saw them turn to using crypto for payments. Check out NSFW.app, a content creator site where adult content creators can sell their content for Web3 amounts. 

However, these new crackdowns by the Democrats (alongside the Republican state’s war on the porn industry as they already passed multiple age ID laws for porn sites) could mean the adult industry, and the creators within, are being unjustly cut off from financial access as they deal with banking discrimination. Where crypto was once a potential haven for the adult industry to safely and securely receive payments, it has become bleak as many wait to see how the chips will fall with these Federal-level crackdowns on crypto.  

These new crackdowns have been cited as ‘unconstitutional’ as they unjustly target ‘politically controversial businesses,’ including the adult entertainment industry and the creators within. Without access to banking, these creators risk losing their livelihoods, homes and lives as they cannot access their money. 

The overall impact of Operation Choke Point 2.0 remains to be seen, with many activist groups, including the ACLU (who have filed a complaint against Mastercard for their discriminatory policies towards adult industry creators and sex workers) and the FSC, trying to stop it before it gets started. It could see a step backward for the destigmatization of sex work and the adult service industries at a Federal level in the US. And with the new state laws targeting porn sites, this could see a huge step back in attitudes toward sex, pleasure, and the adult industry. 

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