Elon Musk’s X Money Hits Regulatory Snag in New York

Elon Musk’s grand ambition to turn X into a financial powerhouse with its own integrated money transfer service, known internally as X Money, has collided head-on with the strict financial watchdogs of New York.

While X has already secured licenses in several other states, New York – the financial capital of the world – remains unconvinced that the platform has the muscle and safeguards needed to tackle money laundering, terrorism financing, and fraud prevention at scale.

Musk has consistently pitched X as more than just a social media network, envisioning it as a hybrid of marketplace, news hub, and digital wallet. In theory, X Money would let users send and receive funds seamlessly within the platform. But according to insiders who spoke with The Information, regulators in New York have taken a hard look and simply do not see the necessary infrastructure. Concerns center on two fronts: insufficient compliance staff and Musk’s reluctance to deploy secure logins like two-factor authentication. Without these, regulators argue, the service would be an open door to fraudsters and potentially even illicit financing networks.

What makes the situation more tangled is Musk’s own insistence that X Money cannot roll out piecemeal – it must launch nationwide or not at all. This all-or-nothing approach may be stalling progress even further, as waiting on New York’s green light keeps the project from advancing in states where it has already been approved. Sources say that regulatory skepticism has already caused internal turbulence at X, with high staff turnover and the exit of key compliance and legal executives.

Meanwhile, Musk’s attention seems to be wandering elsewhere. The billionaire has been hyping Grok, his AI chatbot, while also discussing new advertising models on X. In a recent presentation, he lamented that not a single product had been sold directly through X ads so far, despite its massive user base. Yet Musk continues to talk big, promising that ads on X will eventually become something users actually enjoy – a radical departure from the annoyance that online advertising typically provokes.

The juxtaposition is striking: on one side, Musk pitches futuristic visions of chatbots and ad revolutions, while on the other, regulators and former employees cast doubt on whether X can meet the bare minimum requirements to responsibly handle user funds. The Financial Services Department in New York has a history of setting the global tone for fintech compliance. If X Money cannot satisfy its standards, the dream of a borderless, built-in payments system for Musk’s platform may remain stuck in regulatory limbo.

For now, X users will have to keep waiting to see if Musk can deliver on his promise of transforming the platform into an “everything app.” The bold ideas are there – but until compliance issues, staff instability, and security concerns are addressed, X Money looks more like a stalled experiment than a financial revolution in the making.