X Money took the referee apart the night before he went online
It took only nine days between the announcement of the contest and the dismantling of the judges. 。
Original by Ada, Deep tide TechFlow
On February 7, 2025, four young people entered a federal office building in Washington。
They belong to the Ministry of Government Efficiency, headed by DoGE, Elon Musk. Their destination is the CFPB headquarters. This agency oversees all digital payment products in the United States, including Apple Pay, Venmo, Cash App, and X Money, which is on line。
According to Bloomberg, the DOGE team was initially given "read-only" access. But late Friday night, Russell Vought, Director of the White House Office of Management and Budget, sent an e-mail requesting broader data access to DOGE. 90 minutes later, Vought was appointed Acting Director of CFPB。
BY SUNDAY, THE CFPB HAD BECOME A SKELETON. FUNDS HAVE BEEN FROZEN, ACTIVITIES SUSPENDED AND NEARLY 90 PER CENT OF EMPLOYEES FACE DISMISSAL。
And nine days ago, X just announced cooperation with Visa。
Nine days. It took only nine days between the announcement of the contest and the dismantling of the judges。
Compulsory marathon and nine days of lightning
In 2013, Coinbase registered FinCEN as a money service provider and became the first encryption company to embrace federal regulation. It was less than $200 in bitcoin that year, and the market value of the entire industry was not enough to buy an apartment in Manhattan。
The next decade was a compliance marathon. Coinbase obtained currency transfer plates in 49 states and territories, each with a bond ranging from $10 to $0.5 million and a net asset threshold ranging from $50 to $2 million. The application for BitLicense, New York State, is particularly abusive and requires quarterly financial reports and annual independent audits. Coinbase ' s compliance architecture revolves around three core pillars: regulatory registration, operational transparency and active interaction with financial regulators, with the full compliance architecture covering over 100 countries。
But the lawsuit came. In 2023, the SEC sued Coinbase on the grounds that it "operates an unregistered stock exchange". The company was forced into a prolonged legal war. The Court of Appeals for the Third Circuit ruled that the SEC had "not explained fully why it refused to make the rules", which was a half-winner. But what really got the lawsuit dropped was the 2024 American election. Coinbase and the Super Political Action Committee in the encryption industry destroyed more than $130 million to help with the campaign, and Coinbase alone paid $75 million. In February 2025, the newly appointed Acting President of the SEC, Mark Uyeda, withdrew the charges against Coinbase, without conditions, without fines and without further grounds。
Ten years of compliance, one case, $75 million in political contributions. This is Coinbase's price for getting the word "lawful business"。
PayPal is going another way, but it's equally expensive. PayPal introduced the stabilization currency PYUSD in August 2023 by Paxos Trust Company, supervised by the New York State Financial Services Authority. The 100 per cent reserve support and monthly public certificates required by GENIUS Act are all done by PYUSD. And each extension to a new block chain (from Ether to Solana to Stellar) requires regulatory approval of NYDFS. PayPal announced in December 2025 that PYUSD was "the largest dollar-stable currency ever approved by the Federation"。
The rules are so fixed. Access to United States financial markets requires one state to obtain a license and one regulator to pass through. Coinbase spent 10 years, PayPal spent hundreds of millions of dollars on compliance infrastructure。
X Payments LLC also took the license plate. As of May 2025, it had obtained currency transfer permits in 40 states. Formally all compliance。
However, the distance between formal compliance and substantive regulation is not the same。
On November 21, 2024, the CFPB finalized a rule for federal regulation of large-scale digital payments processing more than 50 million transactions, in the same way as traditional credit cards, bank accounts. This rule directly covers X Money. Six days later, Musk wrote on X: "Delete CFPB"。
THREE MONTHS LATER, DOGE ENTERED THE CFPB. THREE MONTHS LATER, THE SENATE VOTED TO WITHDRAW THE CFPB RULES ON DIGITAL PAYMENTS. ON 9 APRIL, THE HOUSE OF REPRESENTATIVES FOLLOWED SUIT。
Coinbase spent 10 years, $75 million, and a lawsuit at the highest legal level to prove itself legitimate within the framework of the rules. And Musk took the frame itself apart with a tweet and nine days。
The bottom card of the referee
Dismantling the regulatory body is insane. But there's more to the story。
CFPB IS NOT A "CARER" AND IT HAS DATA。
In 2021, in order to assess the consumer protection risks of payment technologies, CFPB issued mandatory data harmonization orders to Amazon, Apple, Facebook, Google, PayPal and Square (now Block). These companies submitted a significant amount of confidential business information, including product strategies, internal operating data and compliance records. In subsequent years, CFPB has initiated investigations or enforcement actions against several of these companies, including PayPal and Cash App。
THESE DATA ARE STILL IN THE CFPB DATABASE。
The DOGE team has access to "all non-confidential databases", including sensitive bank review and enforcement records. According to Bloomberg, DoGE staff began accessing the system on the same day that they entered the CFPB headquarters and did not complete the privacy, network security and ethics training required by the CFPB。
The former Chief Legal Officer of CFPB Seth Frotman, who testified in Congress, said: "He has obtained information not only about consumers but also about competitors
Former CFPB Chief Technical Officer, Ariel Meyer, recalled that five young DOGE team members wandered through the security administrative suite and tried to enter the locked office. She resigned the next day。
Think about what that means. A new player, who was about to enter the payment market, had received medical reports from all major competitors prior to opening his business. Product strategy, operational weaknesses, regulatory issues, undisclosed enforcement information。
Congressman Maxine Waters said more directly at the hearing: "In addition to obtaining consumer data for millions of Americans, Musk can now illegally steal sensitive business information from other American companies in the same industry
A legal scholar, Tim Wu, evaluates this data access as "god-tier" and considers it to be a "great competitive advantage" for companies in the same competition field。
What happens if the founder of an encrypted exchange does the same thing? SEC filed a case, FBI came in, CEO went to jail. This is not a presumption that Sam Bankman-Fried of FTX was sentenced to 25 years for misappropriation of client funds。
The difference is that SBF is a crime under the rules and Musk is operating above the rules。
Backdoor for GENIUS Act
If tearing down the CFPB is "break," then GENIUS Act is "stand." It's just that this "stand" has a back door。
GENIUS Act is the United States Stabilization Currency Regulation Act signed by Trump, which establishes a basic framework for the issuance of stabilization currency, including reserve requirements, information disclosure and the division of regulatory jurisdiction。
But the problem is one provision。
In an open letter to Musk dated 14 April 2026, Senator Elizabeth Warren stated that GENIUS Act contained a “suspicious exemption clause” allowing private commercial companies such as X to issue stabilization coins without the need for partial approval procedures and safeguards required by listed commercial companies。
Warren's question was acute: was Musk or his representative involved in lobbying for or influencing the exemption clause? Because during the drafting and debate of GENIUS Act, Musk was serving as a senior adviser to the President and was also leading DOGE。
In other words, a person who is about to issue a stabilization currency sits in the seat of the rule maker when the stabilization currency bill includes an exemption clause in his favour。
Compare PayPal's PYUSD. Issued by Paxos, under the full supervision of the New York Financial Services Authority, requiring 100 per cent reserve support and monthly third-party audit certificates requiring approval for each extended chain. However, the CLARTY Act draft, which contemplates prohibiting the "possession of a paid stable currency" from generating gains, directly targeted the PYUSD's 4% incentive scheme。
And X Money? Declares that 6% of the deposits are ASY, and that cooperative banks are Cross River Bank, which has been punished by FDIC. In his letter, Warren asks: "What exactly does X Money and Cross River have to do with a 6% return in a federal funds rate of 3.5-3.75%? Is it a high-risk investment, an intrusive data realization, or a knockout?"
FDIC Chairman Travis Hill has made a clear statement in March: within the framework of GENIUS Act, deposits of stable currency users are not protected by FDIC insurance。
PayPal spent two years doing GENIUS Act compliance, issuing monthly certificates, approving each chain, etc. X Money got a green passage for it before it went online. This is unfair competition。
The weight of the rule
In April 2026, X Money entered an early public visit. 600 million live users, 6 per cent ASY, in collaboration with Visa, with no federal supervision of CFCB。
In the same month, Coinbase had just received OCC's conditional approval to prepare for Coinbase National Trust Company. From 2013 when FinCEN was registered to 2026, it received approval from the National Trust for 13 years。
Or in April, the chance of Clarity Act passing through the Senate is 50-50。
The narrative of regulation in the encryption industry over the past decade can be summed up in one sentence: give us the rules and we follow them. The premise of this sentence is that the rules are equally applicable to all。
But how much weight does the word "rule" have when someone can open the back door to their own company, tear down the agency responsible for enforcing the law, and take the confidential data of their competitors
The deadline for Warren to reply to Musk is April 21. As of the submission, Musk did not respond publicly。
And X Money is online。
