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In a letter sent this week to New York State Department of Financial Services (DFS) superintendent Adrienne Harris, representative Micah Lasher and Senator Brad Hoylman-Sigal, both Democrats, have pushed for the the agency to reject an application from X Payments LLC, a subsidiary of X Corp, the social network formerly known as Twitter.
The lawmakers cited what they describe as a pattern of reckless conduct by the social media and technology platform led by Elon Musk, and warned that legal conflicts could endanger consumers and competition in financial services.
“In order to obtain a money transmitter license in New York State, an applicant must demonstrate that their ‘business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of this article, and in a manner commanding the confidence and trust of the community,’” the lawmakers said.
They argue that Musk, X’s chair and chief technology officer, fails to meet that standard.
Citing his leadership of the federal Department of Government Efficiency (DOGE), Lasher and Hoylman-Sigal accuse Musk of actively undermining the Consumer Financial Protection Bureau (CFPB), which is the primary US regulator for payments, while simultaneously seeking to enter the very markets that the agency oversees.
“Musk is dismantling the very federal agency that would regulate his payments business and obtaining access to confidential competitor information,” the politicians wrote. “The potential consequences for competition in payments markets are dire.”
Key criticisms
The lawmakers pointed to news reports and legal filings that have suggested Musk and his DOGE staff gained inappropriate access to confidential regulatory and competitive data, including private financial information from federal databases, in possible violation of privacy laws and conflict of interest rules.
They also suggest that X “has exposed sensitive consumer data after failing to stop numerous security and data breaches”.
“X’s ability to capture and monetise both personal and financial data via payments raises key questions about surveillance, consumer opt-ins, and the circumstances under which consumers could have accounts suspended or shut down.”
Lasher and Hoylman-Sigal say that the company has been subject to a number of “massive data breaches that have put millions of consumers at risk,” while warning that since taking over in 2022, Musk has rolled back several safety features.
“Security and privacy risks are particularly acute in light of the history of super-apps such as WeChat, which have been involved in extensive corporate abuses and privacy invasions at individuals’ expense,” the lawmakers suggest, making reference to Musk’s intentions to transform X into such a super-app by bundling multiple services, including payments, messaging, and e-commerce, into a single platform.
According to reports, X has secured money transmitter licences in 40 states and Washington, D.C. and is registered with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
On the commercial side, in January 2025, the company announced a partnership with Visa, suggesting an ambition to more profoundly integrate financial services into the X platform.
What could this mean?
If New York’s DFS does deny X a money transmitter licence, it would be a major impediment to its chances of being taken seriously as a player in US payments and banking.
Without authorisation from the New York regulator, X would be barred from offering payment services, such as peer-to-peer transfers or digital wallets, to users in the state.
Given New York’s status as a major financial hub not only in the US but globally, this exclusion would also be an impediment to the company’s reach and credibility.
A denial could also damage X’s broader regulatory standing.
In addition, a refusal by New York to licence X might prompt greater scrutiny from other state regulators and cast doubt on the company’s fitness to operate as a licensed payments provider. It may also create reputational concerns for partners such as Visa.
However, X says on its website that it has already received licences from neighbouring US states, which are also liberal leaning, such as Connecticut, New Hampshire and New Jersey.
In addition, California, which has a similarly rigorous regime and politics to New York, has granted the company a licence.
Being locked out of New York would undermine Elon Musk’s stated vision of turning X into that “everything app” he dreams of, encompassing users’ entire financial lives.
Without access to one of the largest US markets — and its fourth largest population by state — national rollout becomes more complicated and less attractive to users and financial partners.
