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The rise of iPhones and Google Android phones has created a secure mobile communications problem. Government and military employees — including the president — use Apple iPhones or a variety of Android devices that are vulnerable to hacking, even with the use of encrypted communications apps like Signal. That’s why the first big investment Gary Cohn is making after leaving his post in the Trump administration as director of the US Economic Council is aimed at making mobile phones more secure.
Cohn told me in a Recode Decode podcast interview to be posted Friday that he will be deeply involved in the strategy and rollout of products from Hoyos Integrity Corporation, a startup that is planning to launch a new secure mobile phone aimed at government and corporate customers. While he declined to say what the amount of his investment is, he noted it was “significant.”
Since he left the White House, Cohn, who is also the former president of Goldman Sachs, has focused on finance innovation. He joined Spring Labs, a blockchain network for sharing financial data, last year as a board adviser. At Goldman, he was also active in working with Silicon Valley companies.
In the Recode Decode interview, Cohn talked about that and also why he was focusing on cybersecurity by joining the board of advisers for Hoyos. In addition to its secure phone, the startup is planning to launch a “hot” digital wallet — which employs more sophisticated biometrics — that regular consumers can use to make payments using a wide range of monetary assets, including bitcoin. The wallet will also be insured up to $1 million if hacked and will adhere to strict Know Your Client (KYC) and Anti Money Laundering (AML) regulations.
“When I left the government, I was much more concerned about data and communications security. How and where can you have secure communications? How and where can you read secure documents? What is the vulnerability of taking a digital device with you anywhere in the world into a meeting? What meetings can you take a digital device into?” Cohn said. “Anyone who’s spent any time around Washington knows that you really can’t take a cellular device into any meeting where anything of substance is being talked about because they can hack the microphone and listen to the meeting. They can hack the speaker; they can hack the camera and see where everyone’s sitting.”
Ironically, Cohn was discussing this on Wednesday around the same time that Republican House members stormed a SCIF — Sensitive Compartmented Information Facility — in a move to protest the impeachment inquiry aimed at President Donald Trump. The action immediately attracted criticism because they might have made the secured room vulnerable by bringing in their unsecured phones.
Oops! Well, Gary to the rescue!
Secure mobile communications solutions is an interesting and relatively underserved arena, which has become more important with the use of cellphone and other wireless devices. While BlackBerry devices had been widely used in the government and preferred for their stronger security, the iPhones and Android phones that have replaced them are not as secure. When there is a need to be truly secure, most government or military employees need to go to a secure location to communicate.
Using a software license for an operating system that protects the US nuclear arsenal, Hoyos’ secure smartphone will aim to offer truly secure devices that will also be able to use regular apps that are outside of its security compartment.
“I am a civilian version of James Bond’s Q,” joked Hoyos’ CEO, CTO, and founder Hector Hoyos, who has created a number of startups aimed at securing military installations, including the use of iris recognition at checkpoints in the Middle East to more quickly identify possible threats.
While it will be using components from China and other countries, Hoyos said his company’s new devices will be manufactured in Texas for more security to protect the platform.
“How do you acquire biometrics and how do you store it [are] critical as these devices move forward,” said Hoyos. “And how it is all bound to only you as an identity is also important, to minimize the ability of hackers to access you and then others linked to you.”
Cohn noted that given the widespread use of mobile devices, there is a big opportunity.
“Look, in the reality of the world today, we have many people working for the United States trying to protect the United States and make us safer. They are learning things on a real-time basis and today they cannot communicate on a real-time basis. They have to go back to secure places, secure locations, to be able to communicate in a secure fashion,” he said. “If we have created — we believe we’ve created a secure device — where they can instantaneously communicate back the information. And the quicker they can get the information back into the system in a secure way, the safer we are as a country. And I believe that is very, very important.”
