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Comment by IgorPartola | Hacker News Reader

The thing is, they are actually identifying a lot of real world problems and there is absolutely a market for what they are doing, both in terms of Johns looking for a sex worker, as well as sex workers looking for marketing, security, and insurance. If sex work was legal in more places, this would be a very viable business, assuming they manage to avoid the pitfalls Uber fell into: sexism and harassment, ignoring labor laws, getting involved in corporate espionage.

But in the current legal system, yeah good luck. And good luck raising money.

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We're probably going to mostly fill our Series A within a week (turning on the site in an hour or two). We have lots of expressed interest already. It's not hard for investors. Use Tor when trading our ERC20 token-shares, or pay with Monero - very hard to trace. We're working on the dividend-payment system, but it's safe to say we will offer high anonymity there, too.

The demand for our solution is HUGE, and it is a lucrative business.

Our starting cities (Dublin or Toronto) have legal sex work, but everything around it is illegal (including buying!). That removes the main risk for our workers, to the point we are offering $25,000 legal coverage for all users.

Our core team is small, everyone else are trustless contractors. We are operating as an extrajurisdictional, anonymous, company. De-anonimization is a risk, but we're familiar with operating this way and are OK with the risk. We're also offering up to $100,000 bug bounty, including for de-anon attacks.

The odds are not in your favor when you're up against a nation state with unlimited resources.

I hope your investors have good lawyers. Prison is no fun and proper opsec forever is not practical.

That isn't the problem. It's more likely that if they are anonymous that they simply take the money from investors and run.

Any measure they take to protect themselves from the law also protects them from their investors, since a lawsuit necessarily relies on the law to enforce an agreement.

We're only raising a Series A right now. To globally expand, we're going to need to blockchain IPO, aimed at January when the first city is running. We are holding back a chunk of stock for secondary offerings because we may need a future raise. We want to grow fast and big, and that's not cheap. It's a highly profitable business so we won't need billions but still.

We're investigating how we can enforce some of the rules via smart contracts, but there's still likely to be loopholes.

As someone who is doing a similarly-shady project without any investment, this whole idea that you can take money via blockchain and get away with it is stupid.

You're going to get caught. Then what?

The only way to do projects like this is to do it free, without receiving any substantial amount of money. I'm probably going to do an ICO, but it's solely to cover my own dev costs. The token won't have any utility. I won't have "investors" in the sense that people are expecting a >10x return. They're only "investing" in the vision and the people, not monetary returns.

You can't just take untraceable money for making a prostitution app and then expect the world to be ok with what you're doing. Heck, people will hate me for my project if it goes anywhere and the only thing that will save me (hopefully) is that I didn't try to turn a profit while doing it.

Raising money and trying to build out a huge team while skirting the law so flagrantly is a pipe dream and it makes me question your motives.

The vast majority of our contractors are going to be hired in a trustless manner and do not pose a risk to Pink itself. The only people that do are well-known, trusted, people that have been though previous projects.

As far as getting the money out, first, a lot of the business is cash and the providers just keep it, just like today. The profits mostly go to investors, so we're talking anyone who buys an ERC20-tokenshare. Use Tor, tumble coins and then run through ZCash and Monero if you're really concerned.

Look at all the indictments for similar projects. So far there's been no real tracing of money, just huge opsec errors.

> We're only raising a Series A right now.

So, just to clarify, your answer to the objection that investors have absolutely no legal recourse against you and no way to enforce their equity stake is to say that you aren't really asking them for that much money, and you might ask them for way more later?

I certainly grant that you might get away with this enterprise. Criminals get away with crime all the time, and sometimes make a ton of money doing it. There's simply no way for an outside investor to make money off of your criminal activity though. If you have no issue with breaking the law, why wouldn't you also break an agreement with your investors, especially when you have a huge financial incentive to? I mean, if you already have the FBI after you, why would you have any qualms about breaking some silly little contract, especially since you are anonymous and by your own admission quite good at protection your anonymity?

There is no way to answer your question in a way that will satisfy you. The best way to assuage your concerns is to hop on Slack and talk to him. He doesn't make himself hard to talk to.

It's always a risk. But investors choose whether to take that risk. And from speaking to at least one of their potential investors, they don't seem to be too bothered by that since they have gobs of ETH. They stand to lose $10k but make much more.

It's a greedy motive that will likely result in them losing their money, but meh. It's their call.

> There is no way to answer your question in a way that will satisfy you.

Most startups answer this question quite well. I am hardly asking for something difficult. What's special about this one? Uber, despite the grey areas in it's business, is legally bound to it's investors. It's founders are not anonymous and can be held to their agreements.

> It's always a risk. But investors choose whether to take that risk.

Usually the risk is that you will lose money if the business fails and make your money back if it succeeds. In this case, the business has no rational reason to pay you anything even if it succeeds. Most startups fail, but for this one, none of it's founders has any skin in the game. They don't even suffer a hit to their reputation if they walk away, because they're anonymous!

> The best way to assuage your concerns is to hop on Slack and talk to him. He doesn't make himself hard to talk to.

Is this your standard? Jordon Belford would have passed this with flying colors. Anyone who is any good at sales knows how to sound honest despite the veracity of their sales pitch.

>If you have no issue with breaking the law

We have no issue breaking an unfair, unjust law that actively hurts people. Example: A judge ruled that the gang-rape of a sex worker was merely "theft of services".

And what is the workflow for filing a claim based on the coverage you offer?

> It's not hard for investors. Use Tor when trading our ERC20 token-shares, or pay with Monero - very hard to trace.

What recourse does an investor have against you to force you to pay their share of the profits, or recover their investment when you have an exit if the relationship is under the table? I'm sure you make it easy for an investor to give you money in a grey fashion, but what enforceable guarantees do they have that they own part of your business?

Or are you taking money from organizations/entities that aren't worried, because they have more "direct" ways of enforcing their claim over you? Every measure you take to protect yourself from law enforcement also protects you from any attempt from investors to sue you or reclaim their money.

Yes, they're identifying real world problems, but they're not solving it. You can't simultaneously have anonymity, while providing security for sex workers. These are both stated goals, across their various outlets.

The anonymity is for our core team, so we can stay operational[1]. But that is very few people. Other contractors are trustless. On-ground people will be rotated often enough (and well paid to compensate for that).

Obviously actual workers can't remain anonymous when they meet users :]. But we can screen everyone involved to reduce the risk of LE infiltration. For providers, we will actually take their pictures, check ID, and make sure they actually provide service (just a 2 minute "test"): something an undercover cop will not do.

Or maybe I am misunderstanding, how do you feel we are not solving things?

1: https://medium.com/@PinkApp/pink-app-trading-latency-for-ano...

1) You seem to have gotten your legal advice from Badger, and not Saul.

https://www.adn.com/alaska-news/crime-courts/2017/05/07/bill...

Forcing the narc to snort coke is not a viable means of weeding them out.

2) In places where it is illegal to buy, you have to provide anonymity for the buyers. Looks like you're already making plans to do just that. Good for you. You're now no longer capable of keeping your contractors safe.

---

My advice to you: Commit one crime at a time. Even Uber managed to do that. :P

1: I suppose it's possible that enough undercover cops are going to have sex with strangers to make a bust. I agree this does not work for clients (often male) - a cop won't mind having to touch someone for a bit. But a provider (often female), having sex with someone for a sting? I'm not sure that'll be common.

On top of that, for them to collect more evidence, they'd have to continuously engage in having sex with strangers. If they stop, they'll get us to investigate as they'd be red-flagged right away (just like in Uber, if the driver drops you off in the middle of nowhere, you're going to open a support ticket right away). All this to get a few buying prostitution charges?

2: We provide privacy, not anonymity for both parties. We will verify identities to each provider's desired level. The verification stays within Pink's platform and isn't exposed to the provider. So the client can know we're not sharing this info, and the provider knows we have checked out the client. We show a picture of the other person when they meet. If it's not the same as who we verified, they can cancel the date or request security. (We have an article that will go out today explaining our secure in-person date protocol).

You seem to have not considered rewards and informants. Law enforcement doesn't need to personally be party to a transaction to gather evidence of it.

Re anonymity, comparison to Silk Road etc.: do you have a dual BA in math and CS from Rice?

> make sure they actually provide service (just a 2 minute "test")

If that's implying what I think it is, that's an extraordinarily chilling thing to mention as a parenthetical.

It's not chilling, why do you say that?

As part of the onboarding process, the worker will perform sample services. We will pay them for this (along with referral fees if they were referred). Having sex with people is what a sex worker's job is. It's just that the client in this case will report to us and verify their ID.

Seems like a good way to filter out people that are not serious or have ulterior motives (such as law enforcement).

No, it doesn't, though it seems to be the standard method that people ignorant of law enforcement come up with and think they have solved the problem of keeping LE out.

For a start, if soliciting prostitution is illegal, the LE agent doesn't have to perform service, they just have to bust the “client/screener”, and turn them so that they report back properly.

You're correct, this can be subverted. Though it would not last very long. The thing many people seem to forget when talking to us is that this business is already happening. People are working off classified ad sites, like eros.com. The verification procedures are being used by workers charging from $$$ to $$$$. So while this isn't perfect, it's far better than anything existing.

And in the end, what does LE end up with by doing all this? A few individual prostitution "busts", with no real change.

turn them so that they report back properly.

But that only works if the client/screener can actually lead you anywhere.

It also works if you want to keep arresting Johns and make the service unreliable in your jurisdiction, too.

Note that a similar technique also works for criminal gangs interested in robbing Johns who want to exploit your platform for their funnel.

Theoretically you're right. In practice no jurisdictions are actually carrying out a denial of service on escorts. They could. They could buy ads and people to comply and turn over intel and on and on... yet they don't. There's a few busts here and there, mostly when they can take down a whole brother/agency/parlor. Plus low-level arrests, typically against minorities, for prostitution.

> But we can screen everyone involved to reduce the risk of LE infiltration.

Criminal conspiracies always seem to think this, and its a belief that quite often leads to their downfall.

Because (1) law enforcement can pass screenings designed to weed them out, (2) law enforcement informants can pass screenings that law enforcement might not, and (3) law enforcement can turn people after they are screened.

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