Elon Musk is under scrutiny regarding his upcoming payments platform, X Money, as concerns emerge about its potential risks to consumers and financial security. In a letter addressed to Musk, Senator Elizabeth Warren (D-MA) voiced apprehensions about X Money, highlighting its implications for consumer safety and the overall stability of the financial system.
Warren, who serves as the leading Democrat on the Senate Committee on Banking, Housing, and Urban Affairs, expressed doubts about Musk’s ability to manage a payments service effectively. She pointed to X’s history of regulatory challenges, particularly regarding the platform’s handling of child sexual abuse material, with some content reportedly generated by its AI chatbot, Grok. The senator also referenced a report from the Tech Transparency Project revealing that X had permitted individuals on U.S. sanctions lists—such as those associated with Hezbollah and Houthi officials—to subscribe to premium services.
In her correspondence, Warren raised alarms about the security risks posed by X Money, including issues related to privacy, potential scams and fraud, and the risk of illicit finance. She noted that William Shatner, the actor known for his role in Star Trek, had shared screenshots of X Money while gaining early access to the platform. One screenshot detailed that deposits would be managed by Cross River Bank, a financial institution that had drawn criticism due to a “serious enforcement action” by the Federal Deposit Insurance Corporation (FDIC) in 2023 for alleged unsafe lending practices. Warren highlighted that Cross River Bank is not new to controversies, having faced similar actions from the FDIC in 2018.
Additionally, Warren referenced the disbandment of the Consumer Financial Protection Bureau (CFPB) and its implications for regulatory oversight of digital payment services like X Money. She indicated that Musk could benefit from the weakening of the CFPB, which recently finalized a rule in 2024 aiming to govern digital payment applications.
Warren’s letter also scrutinized the provisions within the crypto-friendly GENIUS Act, which enables private entities like X to launch stablecoins—a move that aligns with X’s interest in entering the cryptocurrency sector. She set a deadline of April 21st for Musk to respond to over a dozen questions concerning X Money’s operational details, including its partnership with Cross River Bank, potential stablecoin initiatives, and measures to stave off scams and illicit activities. Furthermore, she pressed Musk on whether X Money will engage in the surveillance and monetization of consumer transaction data.
As these concerns gather momentum, The Verge has reached out to X for a response but has yet to receive any feedback. The scrutiny surrounding X Money emphasizes the ongoing regulatory challenges facing new financial platforms and the vital importance of consumer protection in the digital economy.
