The financial industry is a quagmire of censorship, morality policing, and market control. How the financial industry restricts markets is pretty easy to ascertain. Numerous laws exist that prohibit the transfer of money for transactions that the state has declared criminal. That makes the use of the financial industry to perform transactions for things like cannabis more difficult. But how does the financial industry perform censorship and police morality? By deciding who can and cannot have a bank account. We’ve seen this before with gun stores mysteriously having their bank accounts closed. But gun store owners aren’t the only target of the financial industry’s morality policing. The adult entertainment industry has also come under the financial industry’s ire:
Just as ISPs and search engines can become weak links for digital speech, too often financial service providers are pressured by the government to shut down speech or punish speakers who would otherwise be protected by the First Amendment. It’s unclear whether this is an example of government pressure, an internal corporate decision, or some combination.
Chase has yet to give an official statement on why the accounts are being closed. At least one of the customers affected by Chase’s decision to shut down adult entertainers’ accounts, Teagan Presley, was told by Chase that her account was being shut down “because she’s considered ‘high risk.'” According to NY Daily News, her husband Joshua Lehman (whose account is also being closed) reports receiving conflicting information from Chase about why the accounts were being shut down:
I’ve heard three different reasons…When I went into our branch, they said it was the nature of our business. When I called, they said they were closing my personal account because my wife is an ‘infamous’ adult star. When I talked to my branch again, they said it wasn’t because we were in the adult industry but because we did business with a convicted felon.
This isn’t the first time Chase has been under fire for morality-based account closures. In 2013, Chase faced a lawsuit from the founder of MRG Entertainment for denying loans to people within the adult entertainment industry. And just a few months ago, Chase refused to process payments for Lovability, an online condom store. After bad press and public pressure, Chase reversed its decision, but it’s unclear whether Chase ever changed the policies that led to the decision in the first place.
Bank accounts are an Achilles heel for most “legitimate” businesses. Without one it’s difficult, if not impossible, to accept credit and debit card payments and many banks will only cash checks for account holders (or charge non-account holders a nasty cashing fee). Imagine if every bank refused to allow MidwayUSA or Brownells to have a bank account. Those stores would likely be finished.
Centrally controlled financial services, like most centrally controlled industries, are dangerous things to rely on. At any point those services can be used to enforce selected ideals. This is why I see decentralized financial systems, namely cryptocurrencies, as an important development.
I will use Bitcoin as an example because it is the most well known, but there are many cryptocurrencies out there with similar advantages. Bitcoin is a decentralized system. It doesn’t attempt to judge whether or not a transaction is legal, moral, or otherwise acceptable. The only thing the Bitcoin network attempts to do is ensure transactions are recorded and the appropriate amount of Bitcoin is transferred between accounts. Adult entertainers can bypass the financial industry’s censorship by accepting Bitcoin and may have to resort to doing so if things continue as they have been.
Cryptocurrencies really shine, at least in my opinion, because they enable the transfer of wealth without the risk of third-party judgements. As governments and industries (but I repeat myself) continue their efforts to control markets it will become more important to develop tools that allow people to bypass their controls. Obviously cryptocurrencies aren’t the be-all and end-all. Controls can still be inflicted by delivery services, manufacturers, and many other middlemen that are commonly involved in a transaction.