Enlarge (credit: Manuel Augusto Moreno | Moment )

Just two weeks after Elon Musk took over Twitter in fall 2022, he told employees that his big plan to save the social media platform from bankruptcy was to turn it into a bank . Since then, he has rebranded the platform as X, and banking regulators in eight US states have approved his applications for money-transmitting licenses.

Now, as X continues filing for money-transmitting licenses— in pursuit of turning X into an "everything app," a one-stop destination where users bank, shop, communicate, and basically spend all their time online—US banking regulators are being urged to reconsider approving X's applications to provide financial services, The Guardian reported . And Ars confirmed that states that already granted licenses are being pressured to revoke them.

In an open letter reviewed by Ars, lawyers at Walden Macht & Haran LLP—who are representing a Saudi family suing Twitter/X —warned both “attorneys general and banking commissioners across 50 states” that Musk's company should be considered "unfit" to hold banking licenses. They alleged that X is unfit for banking due to its alleged treatment of users’ personal data and "intentional complicity" in human rights violations. These grievances, The Guardian reported, also call into question whether X "can be trusted to abide by federal and state laws protecting consumer data and records."

Enlarge (credit: Pgiam | iStock / Getty Images Plus )

Yesterday, Congress members revealed the results of a seven-month investigation into tax-filing companies. Lawmakers found that H&R Block, TaxAct, and TaxSlayer "recklessly shared" potentially hundreds of millions of taxpayers' sensitive personal and financial data with Google and Meta "for years" in apparent violation of laws prohibiting tax preparers from sharing tax return information without customers' consent.

In a press release provided to Ars from the office of Senator Elizabeth Warren (D-Mass.), lawmakers alleged a "massive, likely illegal breach of taxpayer privacy." Insisting upon urgent redress, lawmakers are now calling upon the Department of Justice, the Internal Revenue Service (IRS), the Federal Trade Commission, and the Treasury Inspector General for Tax Administration to "fully investigate this matter and prosecute any company or individuals who violated the law."

The Congress members' report said that "any tax return preparer who 'knowingly or recklessly discloses'" tax return information "is subject to a fine up to $1,000 per violation, and a prison term of up to one year."

Enlarge / FTC Chair Lina Khan said the commission intends to act on commercial data collection, which happens at "a massive scale and in a stunning array of contexts." (credit: Getty Images)

The Federal Trade Commission has kicked off the rulemaking process for privacy regulations that could restrict online surveillance and punish bad data-security practices. It's a move that some privacy advocates say is long overdue, as similar Congressional efforts face endless uncertainty.

The Advanced Notice of Proposed Rulemaking , approved on a 3-2 vote along partisan lines, was spurred by commercial data collection, which occurs at "a massive scale and in a stunning array of contexts," FTC Chair Lina M. Khan said in a press release . Companies surveil online activity, friend networks, browsing and purchase history, location data, and other details; analyze it with opaque algorithms; and sell it through "the massive, opaque market for consumer data," Khan said.

Companies can also fail to secure that data or use it to make services addictive to children. They can also potentially discriminate against customers based on legally protected statuses like race, gender, religion, and age, the FTC said. What's more, the release said, some companies make taking part in their "commercial surveillance" required for service or charge a premium to avoid it, employing dark patterns to keep the systems in place.