Senator Richard Blumenthal, D-CT, speaks during a Senate Judiciary Committee hearing on the January 6th insurrection, in the Hart Senate Office Building on Capitol Hill in Washington, DC, March 2, 2021.
Graeme Jennings | Pool via Reuters
Sen. Richard Blumenthal this week pressed Visa for detailed plans and documents related to its deal to provide payments services to Elon Musk‘s social media site, X, as it prepares to launch a digital wallet.
Blumenthal, a Democrat from Connecticut and the ranking member of the Senate’s Permanent Subcommittee on Investigations, pointed to Musk’s role in hobbling the Consumer Financial Protection Bureau — the consumer watchdog that would be a key regulator of the X Money service — as among the reasons for the information request, according to a March 6 letter obtained by CNBC.
“Given the unique position of X Chairman and Chief Technology Officer Elon Musk as leader of the Department of Government Efficiency and his recent role in gutting the Consumer Financial Protection Bureau … Visa stands to take advantage of the deep conflicts of interest and unscrupulous conduct of its new business partner,” Blumenthal wrote.
The Senate request is one of the first signs of scrutiny on Visa, which runs the world’s largest credit card network, after a late January announcement that it had agreed to power peer-to-peer payments on X. Days after the deal was disclosed, operatives from Musk’s Department of Government Efficiency gained access to CFPB data systems, leading to accusations that Musk wanted to kneecap a future regulator and that he could steal trade secrets of competitors to his nascent X Money service.
The letter, addressed to Visa CEO Ryan McInerney, also cast doubts about whether a social media network known for “bots, scams and hate speech” would be able to prevent scams and fraud from proliferating on the site. Musk purchased the site in 2022, when it was known as Twitter.
“These concerns raise questions about X’s ability to protect consumers from fraud and scams as it ventures into the financial sector,” Blumenthal wrote.
“As the largest payment processor in the world, Visa has a legal responsibility to ensure its network is free of financial crime such as scams and fraud, money-laundering, terrorist financing, and more,” he said.
Blumenthal asked for a detailed description of Visa’s plans to enable payments on X, including the business model of the service and Visa’s role in compliance with regulatory requirements around money laundering and illicit remittances.
He also pressed Visa for “all records” related to the deal and communications between X, Visa, DOGE and CFPB personnel.
Representatives for Visa and X didn’t immediately have comment.
Content Source: www.cnbc.com