Friday, June 24, 2022

Credit Cards, PayPal, Even Coinbase Are Cutting off ‘Extremist’ Groups

Credit Cards, PayPal, Even Coinbase Are Cutting off ‘Extremist’ Groups

Major U.S. payment processors are reportedly cutting services to “extremist” political organizations they say incite violence. The actions involve credit card companies, PayPal, and even popular bitcoin exchange Coinbase.

Also read: Korea Trades $1.7 Billion USD in Bitcoin Cash as Price Surges

‘Extremist’ Groups Point Fingers After Charlottesville

Events have escalated in the wake of chaotic clashes last weekend in Charlottesville, Virginia, that led to the death of one protestor and dozens of injuries. The aftermath is several ongoing Internet, media and political skirmishes over who was to blame.

The New York Post reported that Discover referred to the Charlottesville events specifically, in announcing it would terminate merchant agreements with “hate groups”. Visa said it already prohibited its banking clients from dealing with sites that incite violence.

Mastercard also added that it doesn’t ban merchants based on political views, but continues to monitor its network for signs of illegal activity.

Coinbase and PayPal Cut Transfers to Right-Wing News Sites

PayPal has reportedly cut fund transfers to “alt-right” news sites including VDARE and American Renaissance. In another sign of the times, even sites accepting bitcoin have allegedly been affected. Social media accounts associated with (proudly) neo-nazi blog The Daily Stormer said Coinbase had blocked its transfers. That site was also booted from the open internet by at least three domain name registrars.

Debit cards credit cardsThe Post article cited an online activist group named Color of Change, which has waged a campaign to de-fund its list of extremist groups since March this year.

However the report also quoted a credit card company executive as saying it’s “like Whack-a-Mole” trying to deny services to all disagreeable groups. Organizations can simply relaunch their payment portals under new names.

Also, what defines “extremist” and “inciting violence” in these cases is subjective. Some activists have included even libertarians in their definition of “hate groups”.

Card companies may cut off services to avoid bad PR and activist boycotts, but appear reluctant to turn away paying clients whose activities may not actually be illegal.

Bitcoin Still Not Censorship-Resistant for Many

Yesterday we looked at ProtonMail, the encrypted email service that was briefly suspended by PayPal in 2014. If financial services companies start to dramatically broaden the range of clients they won’t serve, censorship-resistant cryptocurrencies will take their place. Or so the theory goes.

freedom of speech censorshipProtonMail still uses credit cards and PayPal, but has worked to more fully integrate Bitcoin payments into its service.

Bitcoin has the added advantage over credit cards of not tying payments directly to an identity. This has already made it popular with porn and gambling sites, and activist fundraising campaigns across the political spectrum.

However, Bitcoin is no more censorship-resistant than PayPal if users still need regulated exchanges to turn it into dollars. Payers’ identities might not be readily available, but wherever there’s a fiat gateway it can be blocked, if enough pressure is applied.

Is that a good thing, or bad? It depends on your point of view. Increased utility and usage will probably raise cryptocurrencies prices. On the other hand, you’ll have to accept that decentralized financial networks will inevitably be used to fund activities you object to.

What’s your opinion on any of these companies’ actions? Where does Bitcoin fit in, if at all? Let’s hear your thoughts.

Images via Pixabay

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