Elon Musk is facing intense scrutiny over his upcoming payments platform, X Money, with Senator Elizabeth Warren raising serious concerns about its potential risks to consumers, national security, and financial stability.
Regulatory Concerns Mount
In a letter to Musk, Senator Warren (D-MA) questions whether X Money can safely handle transactions, citing Musk's "track record operating X" as a major red flag. The platform, set to launch in early public access in April, promises features like funding through Visa Direct, debit card connections for peer-to-peer transactions, and bank account transfers.
History of Controversy
Warren points to X's troubled past, including:
- Regulatory criticism over child sexual abuse material circulation
- AI chatbot Grok generating harmful content
- Allowing users subject to US sanctions to pay for Premium subscriptions
"This track record raises serious questions about the privacy, scams and frauds, and illicit finance risks X Money may pose," Warren writes.
Banking Partner Under Scrutiny
Screenshots from early access users reveal that X Money deposits are "held by Cross River Bank" - an institution that faced FDIC enforcement actions in 2023 and 2018 for "unsafe and unsound practices." Warren calls this partnership particularly concerning given the bank's history of regulatory violations.
Crypto Connections and Regulatory Gaps
The letter highlights how DOGE's dismantling of the Consumer Financial Protection Bureau created regulatory gaps that could benefit X Money. Warren notes that the crypto-friendly GENIUS Act includes suspicious carveouts allowing private companies like X to launch stablecoins - coinciding with X's hints about entering the crypto market.
Demanding Answers
Warren has given Musk until April 21st to answer more than a dozen questions about X Money, including:
- Whether Cross River Bank will serve as its banking partner
- Plans to issue a stablecoin
- Controls to prevent scams, fraud, and illicit finance
- Whether the service will "surveil and monetize consumer transaction data"
The Verge reached out to X for comment but received no immediate response.
Comments
Join Our Community
Sign up to share your thoughts, engage with others, and become part of our growing community.
No comments yet
Be the first to share your thoughts and start the conversation!