Senator Elizabeth Warren (D-MA) issued a formal demand for information to Elon Musk on Tuesday, questioning the safety and regulatory compliance of his upcoming X Money payments platform.
Warren, the top Democrat on the Senate Committee on Banking, Housing, and Urban Affairs, expressed concern that the service could threaten consumers, national security, and financial stability.
In a letter to Musk, Warren cited the platform's potential for fraud and its connection to controversial financial institutions.
Regulatory and security concerns
The senator pointed to X's history of regulatory scrutiny, including issues with child sexual abuse material and the presence of users subject to U.S. sanctions on the platform.
She specifically noted a report from the Tech Transparency Project showing that individuals affiliated with Hezbollah and Houthi officials have used X 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.
Warren also highlighted screenshots of the X Money interface showing deposits held by Cross River Bank. She noted the institution faced FDIC enforcement action in 2023 for "unsafe and unsound practices."
The senator further criticized the recent dismantling of the Consumer Financial Protection Bureau (CFPB) and the GENIUS Act, which she claims provides a "suspicious carveout" for private companies to launch stablecoins.
Musk intends to launch early public access for X Money in April. Former X CEO Linda Yaccarino previously stated the platform would allow users to fund wallets via Visa’s Direct service and connect to debit cards for peer-to-peer transfers.
Warren has given Musk until April 21 to answer more than a dozen questions. These inquiries include whether the platform plans to issue a stablecoin and if X Money will "surveil and monetize consumer transaction data."
X did not immediately respond to requests for comment.
