Sen. Elizabeth Warren (D-Mass.) sent Elon Musk a letter Tuesday demanding answers about X Money by April 21, citing concerns that the upcoming payments platform could pose risks to consumers, national security, and financial stability.
The 13-Question Demand
Warren, the top Democrat on the Senate Committee, is pressing Musk on whether X Money will issue a stablecoin, partner with Cross River Bank, offer 6% APY on deposits, and surveil consumer transaction data.
The letter comes as Musk prepares to launch X Money in early public access this month.
Former X CEO Linda Yaccarino said the platform will allow users to fund their X Wallet using Visa’s Direct service, connect to debit cards for peer-to-peer transactions, and transfer funds to bank accounts.
The Cross River Concern
Screenshots posted by William Shatner, who recently gained early access to X Money, mention that deposits are held by Cross River Bank.
Warren notes the institution faced a serious FDIC enforcement action in 2023 for unsafe and unsound practices related to fair lending.
Cross River Bank is a repeat offender, having faced a previous FDIC enforcement action in 2018 for unfair and deceptive practices, Warren said.
The letter also questions how X Money intends to generate revenue sufficient to pay 6% APY when the target Federal Funds Rate sits at 3.5-3.75%.
The CFPB Angle
Warren called attention to the DOGE (CRYPTO: DOGE)-led dismantling of the Consumer Financial Protection Bureau, which finalized a rule in 2024 to oversee digital payment apps like X Money.
“You stood to gain from the dismantling of the CFPB and its authority,” Warren wrote.
Following DOGE’s incursion at the CFPB, Acting Director Vought closed the agency’s headquarters, attempted to fire almost 90% of its staff, and terminated pending lawsuits and enforcement actions.
Warren asked Musk whether he was aware the CFPB would have jurisdiction over X Money when he tweeted “CFPB RIP” and worked to shutter the agency.
The Stablecoin Carveout
The crypto-friendly GENIUS Act includes a carveout giving private companies like X the ability to launch stablecoins without some of the required approvals that would apply to public commercial companies.
Warren asked whether Musk or anyone working on his behalf had any role in lobbying for or influencing the carveout in the GENIUS Act.
The Track Record
X has faced criticism from regulators over the circulation of child sexual abuse material, including some generated by its AI chatbot Grok.
A report from the Tech Transparency Project found X allows users subject to U.S. sanctions—including people affiliated with Hezbollah and Houthi officials—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 wrote.
Image: Shutterstock
Recent Comments