Former NY Governor Andrew Cuomo Talks Crypto, Midterms

SPEAKER_1 (0:02)

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Scarlet Fu (0:07)

Welcome to our Bloomberg television and radio audiences. I'm Scarlet Fu. Joining us now from Washington, DC is the former governor of New York State and co-chair of the ICE, OKX joint venture, Andrew Cuomo. He's in our Balance of Power studio along with Bloomberg's Joe Mathieu, who will join the conversation in a moment. Governor, thank you for speaking with us today. I want to 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?

Andrew Cuomo (0:50)

The Clarity Act, first, thank you for having me today. 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. That it failed 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 want to 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.

Joe Mathieu (2:43)

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.

Andrew Cuomo (2:56)

Look, 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.

And not just 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 industry has to be policed. So, it's not a, these are no brainers that they have to be addressed. Politics is what got in the way.

Scarlet Fu (4:21)

So, you had mentioned this about how you oversaw the introduction of BIT license, 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 license, it actually drove more than a dozen crypto companies out of the state. Kraken, Bitfinex, 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?

And is that something that European regulators should learn from? And if so, what should they learn from that?

Andrew Cuomo (5:04)

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 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 true framework. We wanted a framework that protected the consumer.