OnlyFans reverses its controversial porn ban

This is an audio transcript of the FT News Briefing podcast episode: OnlyFans reverses its controversial porn ban

Marc Filippino
Good morning from the Financial Times. Today is Thursday, August 26th. This is your FT News Briefing.

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Turkish troops are pulling out of Afghanistan while Turkey’s president said he doesn’t want his country to be a refugee warehouse. And we’ll look at the latest wave of money laundering penalties on banks. Plus, a platform that allows porn stars to make money by selling their videos and other content to fans banned sexually explicit content. Then it reversed that ban. We’ll talk about what happened.

Patricia Nilsson
They have angered a lot of content creators who say that they now know they can’t rely on OnlyFans because they realise now that the platform can kick them out at any moment.

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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Turkey yesterday said it’s begun to withdraw its troops from Kabul airport. The country had offered to keep a battalion there to secure Afghanistan’s link to the outside world. Apparently, that offer was rescinded. Meanwhile, Turkey’s president, Recep Tayyip Erdogan, made it clear he doesn’t want to take in any more Afghan refugees. Turkey’s already home to the world’s largest population of refugees, including 300,000 Afghans who’ve come in recent years. There’s also more than 3.5m Syrians in the country. Erdogan now faces a growing political backlash against migrants. He also faces criticism for his handling of the economy in this summer’s wildfires, which forced thousands of Turks to flee their homes.

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Global money laundering has surged and banks have tried to crack down on criminals trying to hide ill-gotten money in their institutions, but it’s unclear if new measures are having any effect. But what is clear is that regulators are getting tougher with anti-money laundering penalties. According to the risk consultancy Croal, in the first half of this year, authorities levied almost a billion dollars in anti-money laundering or AML fines.

Stephen Morris
Now, banks have had a long time to improve the systems. They’ve spent billions of dollars. They’ve hired hundreds of people. They put in expensive AI monitoring systems. But things are still getting through.

Marc Filippino
That’s the FT’s banking editor Stephen Morris. You rattled off a laundry list of money-laundering scandals in recent years.

Stephen Morris
From the Danske Bank scandal, much of Russian money laundering a few years ago to in the Netherlands this year, where ABN Amro has been fined a huge amount for repeated failings over a number of years following its local peer ING. So we’re seeing a real toughening up on behalf of global regulatory powers, but particularly in Europe. It used to be the US leading these fines. Now it is Europe, namely the UK and the Netherlands.

Marc Filippino
So are regulators just going after big established banks, or are they also going after newer financial technology start-ups as well?

Stephen Morris
Well, the fintechs, you know, fast-growing companies. In Europe we have N26, Monzo, Revolut. They’re acquiring customers at a rapid rate. And what regulators are saying is that their systems are not sophisticated enough to keep pace with this. Now, earlier on this year, in fact, just in July, Monzo revealed that it’s being investigated by the FCA over potential breaches of AML laws, which is obviously very bad for them because it could result in several orders coming down. Slow your pace of customer acquisition. Don’t go in these. Don’t operate in these businesses. And it’s German rival N26 has twice been rebuked by its own domestic regulator, BaFin, for failures in its email controls. And this was so serious that they’ve actually installed a special supervisor, external supervisor to come in and oversee the remediation improvements, these systems. So they’re really cracking down both on the established larger traditional players as well as these fast-growing new entrants.

Marc Filippino
Stephen, is all this tough action by regulators making a dent in money laundering?

Stephen Morris
No, there are various estimates. Just one from the UK is that the money laundering costs the UK economy a hundred billion a year. So no matter what how much fines levied, a lot of money laundering is still slipping through the net. And you know as technology increases and the IT sophistication of criminal syndicates increases, this is only gonna continue. And regulators are making the point that banks have to be an extension of law enforcement and rooting out these practices and stopping them.

Marc Filippino
Stephen Morris is the FT’s banking editor.

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The platform OnlyFans has gained a scintillating kind of fame as a place where sex workers and other celebrities can charge followers for content like videos and photos. But last week, the company’s CEO, Tim Stokely, made a shocking announcement that he would ban sexual content from the platform. You can imagine the reaction on social media.

Patricia Nilsson
People were making jokes saying, you know, this is like Dominos banning pizza.

Marc Filippino
That’s the FT’s Patricia Nilsson. She interviewed OnlyFans CEO Tim Stokely about his ban and he blamed his bankers. He said they were worried about their reputation. So how on earth could OnlyFans survive without pornographic content?

Patricia Nilsson
To be fair to the company, I mean, since they started growing so rapidly during the pandemic, they have added a lot of so-called mainstream creators, you know, sports stars, musicians, chefs. And they were hoping to grow this type of audience. Whether they will succeed or would have been successful without porn as well, it’s hard to say. And I guess as it looks like right now, we might never know.

Marc Filippino
Yeah and we might never know because Stokely yesterday pulled basically a 180 and reversed the porn ban. We’ll get to that in just a minute. But Patricia, what went on with the banks or at least what did the company say went on with the banks?

Patricia Nilsson
So what they were saying was that there were struggling to secure, you know, corporate banking accounts or they were struggling to send money to their creators because between their bank and the bank of their creator, you will need to use a so-called intermediary bank. And some of these the company called out BNY Mellon, for example, were flagging and rejecting any type of wire transfer that had anything to do with OnlyFans. This was, the company told me, becoming increasingly frustrating. And and they they said there was they were beginning to fear they would get to a position where they wouldn’t be able to pay their content creators. That’s what the chief executive, Tim Stokely, told me earlier this week.

Marc Filippino
OK, so then Stokely reverses the ban. Why did he do that?

Patricia Nilsson
Well, it’s a little bit unclear. I mean, there have been a lot of reversals in the past few days. And so the company said on Wednesday that it had received assurances from financial partners that it would be able to bank. The company wouldn’t comment further. I spoke to a couple of sources that basically told me that after Tim Stokely went out and criticised banks, a lot of the anger directed at OnlyFans transferred to banks and financial institutions and that they had since been receiving a lot of phone calls. And then the big banks were basically calling them up and saying, OK, we’re ready to talk. Let’s work this out. Um, that’s you know, that’s that’s what we know right now.

Marc Filippino
So, Patricia, what’s next for OnlyFans? Will any of this have any kind of effect on it?

Patricia Nilsson
Well, one could say it seems like it’s gonna be business as usual. However, they have angered a lot of people. I mean, they have angered a lot of content creators who say that they now know they can’t rely on OnlyFans. They have to diversify, they have to move to other platforms because they realise now that the platform can kick them out at any moment. The company’s also planning a share sale as they’re looking to bring in a new owner or kind of diversify its ownership. I mean, this is porn entrepreneur called Leonid Radvinsky. He is the majority owner of the company and he’s looking to sell part of his stake, essentially. And the company has told me that they’re hoping to bring in some other investor who perhaps is more experienced in banking or or even in media or sports, as I think when it comes to these mainstream content creators, they see sports stars as a very big potential.

Marc Filippino
Patricia Nilsson is the FT’s consumer industries reporter. Thanks, Patricia.

Patricia Nilsson
Thank you.

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Marc Filippino
Before we go, a quick update from Germany, where voters are heading into a big election next month. The field has been blown wide open. Angela Merkel’s long-ruling Christian Democratic Union looked set to win, but it’s been slipping in the polls. And for the first time in 15 years, the centre-left Social Democratic Party has squeaked ahead of the CDU. The narrowing race means that for the first time in postwar history, Germany may be headed for a three-way coalition, and it could include the Green Party, which has held steady in third place, or the pro-business Free Democrats, which have been in fourth. If you wanna keep up to date on the election, the FT is running a poll tracker in the race to succeed Merkel. We’ll have a link to that in today’s show notes.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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