Lucy Guo, 30, built her reputation on disruption. After making a name for herself by creating a viral Twitter bot, she earned a prestigious $100,000 Thiel Fellowship. She then went on to build her AI startup, Scale, into a billion-dollar company, making her one of America’s richest women. In 2018, she landed a coveted spot on the Forbes 30 under 30 list. The world seemed to be at her fingertips.
Guo used her Silicon Valley credibility to found Passes in 2022. Passes is a subscription platform similar to Patreon, OnlyFans, or its primary competitor, Fanfix.
This platform empowers creators to generate recurring revenue for paywalled content and cultivate engaged fan communities. The company envisions transforming today’s top content creators into tomorrow’s big brands.
Passes has so far been another one of Guo’s wild successes. Last February, Passes announced that it had raised $40 million from A-list investors. Investors included Bond Capital, Michael Ovitz (founder of CAA and Crossbeam Ventures), Emma and Jens Grede (founders of SKIMS), Alexandra Botez (professional poker/chess streamer), and others.
The company said that it had paid out tens of millions of dollars to creators. Passes even had several creators on the platform on track to earn over $1 million per year.
Unlike its competitors, Passes allowed creators as young as 15 to make money on the platform. They are simply required to get parental consent. Consent included multiple verification levels. Creators needed a signed consent form, a video conference held with a parent to discuss the creator’s plans for the platform, a copy of the parent’s government I.D., and other checks, according to the suit.
Now, that decision seems to have put Passes in peril.
On February 26th, law firms Clark Smith Villazor LLP and Schwartz Breslin PLLC filed a class action lawsuit against Passes. The filing alleges that Guo and talent managers affiliated with Passes, violated State and Federal law by producing, possessing, and distributing child pornography.
“The Complaint details a scheme where the named defendants, acting on behalf of Passes, recruited young women, that they knew were minors, to create pornography before they reached the age of 18, and to distribute that child pornography on the Passes platform to paying subscribers, both before and after the subject became of age,” the announcement about the lawsuit reads.
The complaint also alleges that Passes took extreme steps to “disguise their scheme and to cover their tracks once their sexual exploitation of minor women was revealed.” One of these steps includes Passes changing their policy on minor content.
Recently, the company announced that it would no longer allow creators under 18 on the platform. The complaint also claims that Passes and Guo misrepresented their relationship with Alec Celestin, a talent manager who allegedly worked closely with Passes.
The lawsuit, filed by 18-year-old Alice Rosenblum in Florida, alleges that Passes distributed sexually explicit material of her while she was still 17. According to the complaint, talent manager Alec Celestin and former Passes executive Lani Ginoza pressured Rosenblum into creating and uploading explicit content, bypassing supposed parental consent safeguards. Celestin and Ginoza are named as defendants in the case, along with Guo and Passes. The accusations have sent shockwaves through the creator economy.
This is an industry already fraught with concerns over child exploitation and lax content moderation. Passes has found itself at the epicenter of a growing controversy over how young internet personalities are monetized.
GetResponse and TikTok LIVE Creator Networks are hosting a VIP rooftop event this Saturday, March 8, from 2 to 5 PM at The Tipsy Alchemist.
🚀 No boring panels. No corporate fluff. Just good vibes, great drinks, BBQ bites, and high-level networking with people actually making moves in the industry.
Headed to Austin this weekend for SXSW? Come hang out with Passionfruit, Creator Economy NYC, Teachable, Bay Area Creator Economy, and tons of our favorite creators (you).
We’ll have drinks, discussions, networking, professional headshots, snacks, and lots more. RSVP here!
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