X Money’s Crypto Ambitions Draw Fire From Senator Over Security Fears

A promise of 6% returns on deposits from a crypto-linked payments platform is raising red flags in Washington — and one senator wants answers.

Warren Zeroes In On The Numbers

The math doesn’t add up, according to Sen. Elizabeth Warren. With the federal funds rate sitting between 3.5% and 3.75%, X Money’s advertised 6% yield on deposits struck the Massachusetts Democrat as suspicious enough to put in writing.

In a letter sent Tuesday to Elon Musk, Warren asked how that return was even possible — and what risks customers might be taking on without knowing it.

X Money is a payments feature being built into the X social media platform. A limited beta preview has already gone out, giving Warren enough to work with.

She named Cross River Bank, X Money’s listed partner, as a point of concern. The bank has previously faced enforcement action from the Federal Deposit Insurance Corporation.

Warren questioned whether the 6% yield was being funded through risky investments, aggressive data collection, or other undisclosed practices.

National Security On The Table

The letter didn’t stop at interest rates. Warren told Musk that X Money’s expected move into stablecoins and cryptocurrency could threaten the broader financial system and US national security.

Warren is a longtime critic of both the crypto industry and Musk personally, and the letter reflects both of those positions.

At the center of her concern is a provision in the Guiding and Establishing National Innovation for US Stablecoins Act — better known as the GENIUS Act. That legislation allows private companies, including non-bank entities, to issue their own dollar-backed tokens.

Warren questioned whether X intends to use that opening to launch its own stablecoin. Based on reports, the law’s framework has drawn pushback from Democratic lawmakers who see it as too permissive toward tech companies looking to enter financial services.

Warren also pressed Musk on what ordinary users would be told about federal deposit protections — or the lack of them.

FDIC Chair Travis Hill confirmed in March that stablecoin deposits held through platforms like X Money would not be covered by federal insurance under the GENIUS Act.

Hill noted the law doesn’t explicitly block pass-through insurance coverage, which would extend FDIC protection to individual users up to $250,000 in the event of a company failure. But he said allowing that would contradict the framework’s broader intent.

Warren’s letter asked whether X Money customers would be clearly informed that their funds carry no federal backstop. It’s a basic consumer question — one that hasn’t been publicly answered.

Musk has not yet responded to the letter.

Featured image from IndieHackers, chart from TradingView