Tech

Gary Cohn is investing with a biometrics company to build a secure smartphone

Key Points
  • Gary Cohn tells CNBC his time as President Trump's chief economic advisor opened his eyes to security issues in the public sector.
  • "When I left the White House, one of the challenges that I set out to see … is finding a solution for secure data and secure communication," Cohn says.
  • Cohn became an adviser and investor in communication technology company Hoyos Integrity and says the company has been working over the past two years on building a secure smartphone that incorporates biometrics.
VIDEO13:3013:30
Sit down with fmr. NEC Director Gary Cohn and Hoyos Integrity CEO Hector Hoyos

Former White House economic advisor Gary Cohn is now into cybersecurity and blockchain.

Cohn told CNBC his time as chief economic advisor to President Donald Trump, which involved meetings with foreign delegations and governments, opened his eyes to the security issues the public sector is dealing with.

"You move to the White House and you have a whole different level of security concerns. We went to foreign countries with phones … the way we had to change phones out and what the security administrations did with the phones and how they couldn't make them any more secure than the private sector could. So, I said to myself, there has to be a better solution," Cohn told CNBC in an exclusive interview Monday night at the Credit Suisse Blockchain and Digital Assets Symposium in New York.

Soon after, Cohn met Hoyos Integrity CEO Hector Hoyos, who has built technology and services used by the U.S. military.

"When I was in the private sector, we always worried about secure data, secure communications, and securing our client's data," added Cohn, who was chief operating officer of Goldman Sachs before he joined the Trump administration in 2017. "When I went to the public sector it's the same issue. What I found out is the public sector didn't have a better solution than the private sector. When I left the White House, one of the challenges that I set out to see … is finding a solution for secure data and secure communication."

Cohn, who left the White House in 2018 reportedly after losing a fight against tariffs, became an adviser and investor in Hoyos' company and says the company has been working over the past two years on building a secure smartphone that incorporates biometrics.

Hoyos hopes to get the new phone in the hands of government agencies such as the CIA and FBI in 2020.

According to a source familiar with the situation, Credit Suisse and Hoyos have been in a dialogue to create synergies between the two companies, including a potential custody business.

Nuclear bomber software

While many companies including Apple and Alphabet's Google are trying to improve security standards, the risk of getting hacked is an ongoing issue.

Hoyos alleges that the problem lies with the operating systems used by tech companies.

"Many companies attempted to do that in the last few years, and the problem was that the operating systems they were using weren't secure," he said. "Android is not secure; iOS operating system is not secure. We took the operating system from a company in California called Greenhill Software that for 20 years has been the operating system running the nuclear bomber wing of the U.S. We took the system and put it inside a brand new phone … that means no one can intercept that call."

Mobile phones that contain private sensitive information have become a magnet for hackers. Even secure messaging apps that incorporate end-to-end encryption like WhatsApp and Signal are not seen as "unhackable."

WhatsApp, owned by Facebook, sued Israeli data surveillance firm NSO in late October, accusing it of helping its government spy on users across four different continents spanning from journalists to diplomats. WhatsApp alleged that malware and spyware found their way into users' phones, accessing private messages and photos.

Analysts see the WhatsApp hack as an example of how even technologies that incorporate high standards of security are in some cases, vulnerable.

In addition to the phone, Hoyos unveiled a secure digital wallet that allows users to store cryptocurrencies and other digital assets. In the event of a breach, Hoyos Wallet is insured up to $1 million.