When Clarity Fails, Ambiguity Wins: Cuomo

I wanna start on the Clarity Act because you have talked about the need to pass the Clarity Act to help The US lead the future of finance. You've also told Bloomberg back in July that you hoped lawmakers would include full disclosure and clear ethics guidelines to reassure the public, something the Republicans and the White House resisted. So did the Clarity Act fail for the right reasons? The Clarity Act, first, thank you for having me today. You know, we've been talking about digital assets and the fact that digital assets are the future of finance for over a decade. 2014, I passed regulations in New York on digital assets. The Clarity Act probably had the best name of any piece of legislation in a long time because it was actually about clarity. And when clarity failed, ambiguity wins and unpredictability wins. And that's the last thing the industry can actually tolerate. And you're seeing jurisdictions all around the world that are actually putting in regulations and, compliance so companies know the rules of the game. Just tell me the rules of the game. And it is passing us by. I'm a New Yorker, if you can't tell. New York finance capital of the world. And I see this financial future developing outside of The United States. So that's what gives me concern. Did it fail for the right reasons? It failed because of politics. There were differences. There are always differences in a bill. Were there any irreconcilable differences, in my opinion? No. It was politics. We're coming up to an election. Who didn't wanna pass the legislation because the other side would look like they were winners? But there are no right reasons for that bill to fail. We desperately needed it, and we still do. And I hope the lame duck congress, when the politics subsides, they could pass it. Otherwise, January 1, it should be right on the desks because it's a major priority. The same version of this governor, or do changes need to be made to it to get everybody on board? I mean, we live in a political world whether midterms are five weeks away or not. Look. The what? The difference is just before the midterms, the political temperature goes way up. That's the difference. Post midterms, the temperature comes down. Hopefully, some rationality returns, and responsibility returns. And since the political temperature is down, the lawmakers will do what's actually responsible and do their public duty and pass a law that provides a framework for the digital asset future of this country, which is now leading in nations around the globe. So I think the politics derailed it. I think when the politics relaxes, you can see the bill passed because the differences were not irreconcilable. Should we have ethics reform? Yes. Obviously. And not just on on the executive, but also for the legislature. Should we have consumer protection? Of course, we should. We just heard about another hack. Yes. This this industry has to be policed. So it's it's not these are no brainers, that they have to be addressed. Politics is what got in the way. So you had mentioned this about how, you oversaw the introduction of BitLicense, one of the first US regulatory frameworks designed for virtual currency businesses back in 2015. That's when it was implemented. And you're here now to help us learn what Europe can understand from New York's experiment. The thing is, if you were to give an honest assessment of Bit it actually drove more than a dozen crypto companies out of the state. Kraken, BitFinx, Shapeshift, all left rather than comply. Only five companies got licensed in the first three years. So I guess my question is, was bit license too aggressive, or and and is that something that European regular regulators should learn from? And if so, what should they learn from that? Yeah. Well, the, New York bit license, you're right, first in the country, and there are only a handful of states that have passed a license since, and the federal government still doesn't have a framework as we discussed. And more more companies have been licensed by New York than any other state in The United States. But the point of the bit license was this is the future. Let's recognize it. We want it here, but it has to be regulated. You can have innovation and regulation. They're not mutually inconsistent. I think the bit license, as it was implemented in later years, was, in many ways, too stringent, and some companies said it's easier to do business elsewhere. But look. The point of the license was we wanted a a true framework. We wanted a framework that protected the consumer, and that was the point of of the law in the first place. But as it was implemented, and at the time, if you recall, this is going back to the FTX, etcetera, there were scandals, and I think the they they became very cautious. I wanna shift gears a little bit. You mentioned Bitget, and we just spoke with Gracie Chen a a few moments ago. Okay. X launching a customer protection program providing up to €500,000 of coverage against account takeovers and third party attacks. The $387,000,000 that Bitget lost to North Korean hackers, that's been well documented. We just spoke to Grasie about that. The protection, though, that you're offering covers individual account compromises, not exchange level hacks. So if North Korea can drain nearly $400,000,000 from exchanges hot wallets, what good is €500,000 of individual account protection? Yeah. Well, I obviously don't know the details of what happened with Bitget, but our point at OKX is we believe we have the best technology. That's step one. Step two is consumers have to trust that they are dealing with a platform or company in app app that actually understands the fiduciary obligation and has the protections in place. And our way of re reassuring consumers and consumer protection is to say, we are so confident in our system that we will provide insurance if you are attacked and defrauded. Not that you're part of the fraud or it was your fault, but if you have a secure account, then we'll work with you on the security of the account. We are so confident in our system that we will provide protection. And to me, I was former governor. I was also former attorney general. Consumer protection is key. This is finance. This is about trust. You put your money in a company that you trust, and crypto has had questions. Do I trust crypto? I've heard a lot of different things about crypto, and it's OKX's way of saying we're gonna put our money where our mouth is, so to speak, and we will provide protection if your attack, your account is attacked. Let's keep talking about the temperature rising as we head for the midterms. Governor, it's great to have you in our Washington studios, by the way. Thirty five days to go. You must be feeling, that sensation as you creep up on another election day. The Cook political report is talking about as many as 15 seats in the house flipping. We're hearing about a blue wave. When we talked to Charlie Cook last night, though, he said it's not so much a blue wave as a red undertow. Is that how you see it? That's a great term. Yeah. That's why Cook is Cook. Yeah. Yeah. Well, yes. I don't think this is about the Democrats. It's about the Republicans. And it's also about history. Right? We were chatting earlier. I saw this movie. I was HUD's secretary to Bill Clinton in 1992. Hallelujah. Clinton Gore, it was a new era, new leadership. '94, we lose the house and the senate. Why? Because that is the historical pattern. I think it's more pronounced now. There is a lot going on in the world, and there's a lot of anxiety. War in Iran, tariffs. The American people want stability. They want predictability, and they believe they get that with a balance of power. And the past two years, the president and the Republicans have been dominant, and there's a lot of drama. And I think what Americans are saying is we want to have a a more balance in the system, and the way we will achieve more balance is by electing Democrats. I don't think they're saying, wow. Yeah. The Democratic agenda blows me away. These Democrats are really phenomenal. They're saying the Democratic socialist agenda blows us away. That's where a lot of the energy is. And you know a lot about this, having run against Soranh Mamdani. You said a lot of things about him during the campaign. And I'm wondering now that you've seen him in action, what went through your mind when you see him in the Oval Office or Donald Trump at Gracie Mansion? Does he have the playbook for making this work on a mainstream level? No. I don't believe the democratic socialists I don't believe socialism is viable nationwide. Can you sell it in New York City? Can you sell it in Detroit? Can you sell it in Chicago? Can you sell it in LA? Yes. Can you sell it nationwide? No. This is in big cities that have a lot of new immigrants, a lot of young people. My election for mayor, I won with people born in New York City. If you were born in New York City, I won with those voters. It was the, young people who came into New York City. It was the new immigrants. So in those cities, I think you see these, this socialist faction. I don't believe, it works nationwide, and I don't believe that has anything to do with what's going on right now. I think the Democrats are winning despite them because the candidates they have put forth have tended to be highly problematic candidates who are winning anyway. Why? Because it's not about them. It's about just restoring balance, just changing red to blue so the American people take a deep breath and say there's balance restored to the system. I believe that's what's happening. How are you talking about a democrat winning Texas? Right? Winning Alaska. Yeah. That doesn't happen. Republicans can lose Texas. Republicans can lose Alaska. And I think that's what's happening. If you see that shift in the house and if you believe the prediction markets in the senate, you're gonna see a radical shift in what's happening in this town, this town being Washington. Governor Cuomo, we only have about one minute left, and I wanna just end with with crypto because the crypto industry loves to talk about this crypto voter, but you know that is not top of mind for for many voters. It's the economy. It's affordability. It's government ethics, immigration, health care. Is there really such a thing as a meaningful crypto voter block, or is this something that the industry is overstating? There should be. There should be. I think as the crypto industry matures, political maturity will be part of it, and I think you will see them mobilize the crypto voters. You do have tens of millions of Americans who use crypto. Where were they in the debate about the Clarity Act? Where are they as a political force? They haven't really been organized. They haven't really been mobilized, which is ironic because they're probably the most reachable audience by definition. But in a general election, is crypto on the top five issues? No. But when it came to something like the Clarity Act, could the industry have done a better job of mobilizing them? Yes. 100%. And I think what the crypto industry realized is you can't just go to Washington with a boatload of money and make political contributions and think that the the bill is going to pass. It doesn't work that way. So, governor Crumov, if you think there should be a crypto block a a crypto voter block, what do Democrats misunderstand about this? What can they do better? What can they learn from the Republicans when it comes to catering to crypto voters? Well, I think that the Democrats it became hyper political quickly. I don't believe Democrats are inherently against crypto. Right? As I said, New York is a blue state. I passed it in 2014 with an all blue legislature in an all blue town. So they're not inherently against crypto. It is a highly charged political issue right now, and they have questions about corruption in crypto. That's, the political hot button, and that's why I think it's problematic. We saw clarity pass. We now see these agencies passing regulations. If the congress changes, you will see these agency regulations put under a microscope. And all these companies who said, this is great. We now have regulations. And by the way, I understand in the void, had to do something. And the SEC has come up with novel programs. We're participating in them. But when the congress changes, regulation is not legislation. I was HUD secretary. I went through this. And regulations can easily be challenged, investigated, and undone. And that's gonna add more chaos to the system rather than clarity. I