Democratic Senator Elizabeth Warren, a heavy critic of the tech tycoon Elon Musk, is demanding an investigation into X, following claims the social media platform has enabled terrorist groups to carry out financial transactions.
The claims were made in a report titled "US-Sanctioned Terrorists Enjoy Premium Boost on X", released in May by the Tech Transparency Project (TTP), a non-profit and non-partisan research organisation covering technology companies.
“I write with deep concern about recent investigative reporting that X is helping US-sanctioned terrorists engage in financial transactions and facilitating their ability to raise funds, including through the use of cryptocurrencies,” she said in a letter to US Treasury Secretary Scott Bessent and National Security Adviser Marco Rubio.
If the reports are true, Ms Warren said that X and Mr Musk are potentially endangering the safety of US citizens. She also warned that, if not corrected, the risks could grow if extremist groups “create their own stablecoins, as proposed by the Genius Act”, she said, referring to a specific type of cryptocurrency that is pegged to a fiat currency.
In her letter, Ms Warren alleges that the Genius Act – a keenly awaited bill that seeks to create a regulatory apparatus for stablecoins – contains a loophole that would allow companies like X to issue their own cryptocurrency.
“If tech platforms are not abiding by Office of Foreign Asset Control restrictions and the Treasury Department is not enforcing them, the Genius Act as drafted will turbocharge sanctions evasion and other illicit activity,” she warned.
Even though policies listed by X claim that premium services such as verification are not available to entities under US sanctions, an Al Qaeda adviser, a Hezbollah founder, the head of an Iraqi militia group and a top Houthi official who recently lashed out at the “criminal Trump” were all granted premium, verified status, according to TTP. “Several made use of revenue-generating features offered by X, including a button for tips,” the organisation's report said.
The group levelled similar accusations against Mr Musk’s platform last year. According to the organisation, X quickly removed the verification checkmarks from various terrorist accounts following the original report, yet little enforcement has taken place in the months since.
“X’s clean-up effort appears to have been short-lived,” the report read. “TTP’s new investigation found an array of blue checkmark accounts for US-sanctioned individuals and organisations, including several that appeared to simply re-subscribe to premium service or create new accounts after their old ones were restricted or removed by X.”
Despite increasing enthusiasm over the last decade, criticism and scepticism still abounds over crypto, which, unlike fiat currencies, lacks an overall regulatory apparatus and is mostly decentralised, making it appealing to groups with malign intentions.
In May, a US federal court sentenced a man to more than 30 years in prison after finding him guilty of converting $185,000 to cryptocurrency and transferring it to ISIS.
Earlier in the year, an investigation originating from the FBI's field office in New Mexico led to the seizure of $201,400 in cryptocurrency assets that was intended to finance Hamas, according to unsealed court documents.
X has not yet responded to The National’s request to comment on this story.
