Why is Elon Musk facing heat over X Money?
What's the story
Senator Elizabeth Warren has raised concerns over Elon Musk's upcoming payments platform, X Money. In a letter addressed to Musk, Warren said that the new service could pose a risk to consumers and national security. She also questioned its potential impact on the stability of the financial system, citing Musk's "track record operating X."
Regulatory concerns
Warren cites X's history of distributing child sexual abuse material
Warren, who is the leading Democrat on the Senate Committee on Banking, Housing, and Urban Affairs, highlighted that X has been criticized by regulators for distributing child sexual abuse material. This includes some content generated by its AI chatbot Grok. She also referred to a Tech Transparency Project report showing that X allows US-sanctioned users such as Hezbollah affiliates and Houthi officials to buy a Premium subscription.
Banking partnership
Warren questions association with Cross River Bank
Warren also pointed out that X Money deposits are "held by Cross River Bank," which she said faced a "serious enforcement action" by the Federal Deposit Insurance Corporation (FDIC) in 2023 for "unsafe and unsound practices related to fair lending." The senator also questioned whether Cross River Bank would be its partner, if it plans to issue a stablecoin, and what measures would be taken against scams, frauds, and illicit finance.
Data privacy
Warren gives Musk until April 21 to answer questions
Warren also wants to know if X Money will "surveil and monetize consumer transaction data." She gave Musk until April 21 to answer these questions. The senator's letter comes amid concerns over the potential risks of X Money, which is set to launch in early public access this month.