The Scale AI cofounder’s second startup Passes banned creators under 18 ahead of being sued for allegedly hosting child sexual abuse material, which Guo has denied.
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LifestyleTranscript
00:00Today on Forbes, how underage creators became a threat to Lucy Guo's only fan's rival.
00:08Lucy Guo's first startup hit, AI Unicorn Scale, made her one of America's richest women, with
00:14a stake worth more than $500 million.
00:18Her second, Passes, promised to rip up the script on the creator economy set by rivals
00:23Patreon and FanFix, pledging to help creators as young as 15 make more money on what her
00:29startup said was the, quote, safest and most secure creator and fan platform on the planet.
00:35But unlike her competitors, Guo allowed underage teenagers to post revealing content, as long
00:41as they had parental consent.
00:43Passes took off, raising $65 million from investors like Mary Meeker's Bond Capital,
00:50Menlo Ventures, and talent agent Michael Ovitz.
00:53Guo signed deals with celebrities like Shaq, DJ Kygo, gymnast Olivia Dunn, and the college
01:00sports program at the University of Michigan, as well as teenage social media stars like
01:05Ava Madry, singer Cicely Rose, and actress Ava Justin.
01:10But last month, she made an abrupt change.
01:13Passes banned all underage users and purged the site of their content just days before
01:18being hit with a lawsuit accusing the company of hosting child sexual abuse material.
01:24The lawsuit, filed by Florida teenager Alice Rosenblum in civil court at the United States
01:29District Court for the Southern District of Florida, claims Passes hosted and distributed
01:34illegal, sexually explicit images of her in the month before her 18th birthday.
01:39Federal and state laws have strict rules that criminalize the possession or distribution
01:43of any explicit imagery of a minor, even if they are now adults.
01:48Rosenblum's lawyers declined to comment on whether the teen had reported the images
01:52to law enforcement agencies.
01:55When Rosenblum was 17 years old, she was allegedly recruited by Alex Celestin, a talent agent
02:00linked with Guo, who also has an equity stake in Passes, and Lani Genoza, Passes' former
02:06director of talent, who at the time was working for Celestin's agency.
02:11According to the suit, Celestin and Genoza encouraged Rosenblum to take nude images and
02:15videos and upload them to Passes.
02:18Both are named as defendants in the suit, along with Passes and Guo.
02:23The now-18-year-old shouldn't have been able to join the site as a creator without her
02:27parents' permission, but the lawsuit alleges that Passes allowed this check to be skipped,
02:32and other Passes staff removed blocks on her account that would have prevented users from
02:36direct messaging her because she was a minor.
02:39Attorney Christopher Clark, who is representing Rosenblum, told Forbes,
02:44The defendants exploited Ms. Rosenblum and other creators who were minors on Passes,
02:49and they are now sadly victims of child pornography.
02:52We look forward to vindicating their rights in court and obtaining a measure of justice
02:55for them.
02:58Guo, a Forbes 30 Under 30 alum, posted on Instagram a few weeks ago,
03:03The definition of evil is a sad attempt to ruin someone's reputation and business with
03:07false allegations for money, $15 million to be exact.
03:12Guo did not respond to a request for comment.
03:16Passes spokesperson Andrew Brimmer of crisis PR firm Joelle Frank said,
03:21This lawsuit is untethered from reality.
03:23The claims of misconduct relate to the plaintiff's third-party talent manager, Alex Celestin.
03:29Passes is a safe platform for brand-friendly content creators, and we have strict policies
03:33to enforce our content guidelines.
03:35The alleged conduct described in the complaint is a direct violation of our terms of service,
03:42and everything Passes stands for.
03:45With creator platforms like Patreon and FanFix barring underage teens, and social networks
03:50like TikTok, YouTube, and Instagram also preventing minors from earning a share of advertising
03:56revenue without parental consent, teens who have built followings online have few ways
04:01to monetize their fame.
04:03Passes offered an additional option.
04:06But Guo's decision to work with underage creators like Rosenblum has made her the newest
04:10player in a dark corner of the internet where children can build huge online followings
04:15but often draw uncomfortable and dangerous attention from adult men.
04:20It's a rampant problem on social media.
04:22Forbes reported in 2022 that TikTok Live had become a quote,
04:26strip club filled with 15-year-olds, being sent cash gifts, largely by men.
04:33For full coverage, check out Ian Martin's piece on Forbes.com.
04:39This is Kieran Meadows from Forbes.
04:41Thanks for tuning in.