Elizabeth Warren slams Elon Musk over X Money’s rumored crypto feature

A forthcoming payment feature meant to turn X into an “everything app” could threaten national security and the US financial system, Senator Elizabeth Warren warned in a letter to Elon Musk on Tuesday.

Her chief complaint was Musk’s controversial management of the social media platform. But Warren also pointed to rumours the feature, X Money, will include stablecoins and other crypto assets.

Musk has repeatedly said he wants X to become an “everything app,” like China’s WeChat.

“It’s possible [for X] to become the biggest financial institution in the world,” he said in 2023.

X has secured money transmitter licenses across more than three dozen US states, and Musk recently said X Money would make its debut in April.

Warren says she’s worried.

“If your track record operating X is any indication of how you’ll operate X Money, consumers, our national security, and the stability of the financial system may be at risk,” Warren wrote.

The senator cited the platform’s built-in AI chatbot, Grok, which has ben accused of generating child sexual abuse material at users’ request. She also noted X has faced “several data privacy related investigations,” as well as accusations that it took money from sanctioned entities and turned a blind eye to scammers.

X did not immediately return DL News’ request for comment. But the company on Tuesday responded to a report from NBC that found Grok continues to produce nonconsensual, sexualised images of real women despite an earlier pledge to end the practice.

“We strictly prohibit users from generating non-consensual explicit deepfakes and from using our tools to undress real people,” the company said.

“XAI has extensive safeguards in place to prevent such misuse, such as continuous monitoring of public usage, analysis of evasion attempts in real time, frequent model updates, prompt filters, and additional safeguards.”

Crypto concern

Warren also dedicated part of her letter to rumours that X Money would let users transact in crypto.

She singled out the possibility that it would integrate stablecoins, taking advantage of a “suspicious carveout” in last year’s stablecoin legislation, the Genius Act.

That carveout “enables private commercial companies, like X, to issue a stablecoin without some of the required approvals and guardrails that would apply to similarly situated public commercial companies,” Warren wrote.

Musk has yet to explicitly state that X Money will let users transact in crypto. But he has shared another user’s comment that included speculation X Money would feature “crypto integration.”

Warren demanded that Musk answer more than a dozen questions by April 21. Among other things, the senator wants to know whether X will issue a stablecoin and whether Musk had a hand in the Genius Act carveout for private companies.

Musk was a special government employee at the same time lawmakers and White House officials were debating the specifics of the Genius Act, Warren noted. In that role, he led the Department of Government Efficiency, the controversial cost-cutting organisation named after the world’s largest memecoin.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. Have a tip? You can reach him at [email protected].