The shocks in the Israeli offensive cyber industry continue. Following the closure of spyware company Nemesis in April and the closure of Cognate’s offensive cyber division in June, two of the founders of Quadream – one of NSO’s biggest competitors – also sold shares in the company.
A report on the French intelligence website Intelligence Online shows that Guy Geva and Nimrod Rinsky sold shares to a number of Israeli cyber personnel in early June. The third founder, Ilan Deblastin, remains the main shareholder in the squads.
The Ministry of Defense continues to increase pressure
The amount of the sale has not been announced, but as far as is known, Quadrons – as well as its Israeli competitors NSO and Kandiro – are under increasing pressure from API (the Ministry of Defense’s Defense Export Control Division). Licensed states – most of them democratic and western states.
Squadrons, which seeks to sell its systems to Arab countries such as Morocco and Bahrain, has developed an offensive cyber system for security authorities, specializing in iPhones. Similar to NSO’s Pegasus, Quadrare’s software, called Reign, is remotely installed on the phone and capable of extracting all its contents – WhatsApp correspondence, phone calls and meetings recorded on the phone’s camera and microphone.
Unlike NSO, Squadrons operates in a much more unique and secret way. NSO is active in Israel and from there sells its products, maintains a website and its managers are occasionally interviewed in the media. Squad managers, on the other hand, maintain maximum secrecy.
The company, which is located in Ramat Gan, operates under the supervision of AFI and cooperates with a sales office in Cyprus through a partnership with InReach, which held quadrature in Israel.
Restricting exports to democracies hurts the market
As mentioned, the pressure among Israeli offensive cyber companies is increasing due to the strict control laws of the AFI, which limits the number of countries that are exempt from issuing marketing licenses. The list includes 38 democracies in Western Europe, North America Japan.
According to the companies, the Ministry of Defense hardly approves offensive cyber deals with countries in South America, Africa, Asia and the Middle East – the bulk of the export market in the field. The ongoing restrictions have a negative effect on the Israeli cyber market, which has led to the closure of several companies and damage to the revenues of many others – such as NSO, Kandiro and Squadrons.
According to estimates, the Department of Defense’s new policy is the product of a pressure roller coaster by the U.S. administration. This press began after the affair of the investigations on NSO published a year ago in the world media, and the revelations that the spies of Israeli society also acted against American citizens and media outlets around the world.
In order to prevent the dehydration of the private offensive cyber industry on the one hand, the existence of which is important for national security, and on the other hand to prevent national embarrassment on the part of private cyber companies, the defense establishment devised a plan to establish a government company. This company was supposed to work in a model reminiscent of that of Raphael or the aerospace industry, and coordinate attack systems and vulnerabilities from the cyber world. That is, software code that provides information about vulnerabilities in the operating systems of mobile phones and applications. If you will, a kind of government NSO company.
The idea fell out of favor several months ago both because of the fear of identifying private systems and tools of attack as government, and because of a reluctance to nationalize a private industry that employs thousands of workers in Israel.
Offensive cyber companies now expect the Department of Defense to assist them during a visit by US President Joe Biden, who will arrive in Israel in the middle of the month. Biden is expected to bring with him a security entourage led by National Security Adviser Jake Sullivan. Between discussions on relations with Saudi Arabia and the Iranian nuclear program, cyber companies, along with Defense Ministry officials, hope to persuade top US administration officials to reduce pressure on companies.
The goal for the companies is to obtain approval to sign agreements with various countries, including those that are in a peace agreement with Israel, including the United Arab Emirates, Bahrain and countries in Africa and Latin America that do not pose a security risk to Israel and are not considered dictatorships.
Even people close to NSO, for example, are well aware that without the blessing of the White House, it would be difficult to carry out the company’s intention to be sold to the American company L3Harris, a security equipment company from Florida with which it has been negotiating for sale in recent weeks.
After the contacts between the two sides were revealed last month, a senior White House official expressed concern to the Washington Post that the Israeli spy-maker Pegasus is taking steps towards becoming an American company.
The Israeli company, along with Candiro, entered the blacklist of the US Department of Commerce last November, and if it does not leave with the blessing of the administration during the current visit, the current sale will be buried in a grave burial. The Ministry of Defense and some of the offensive cyber companies hope that the US administration will change its approach, as the policy towards the Saudi government has been overturned from end to end.
Between Saudi Arabia and the Nuclear War: Cyber is likely to dissolve
The last period has been very complex in terms of intelligence and the offensive cyber industry in Israel hopes that it will be used to their advantage.
During this period, such and such espionage was used to locate hostile elements around the world, and companies expect the Ministry of Defense to understand that the extinction of the Israeli offensive cyber industry means the loss of local capabilities and the encouragement of attacks and intelligence weaknesses abroad, as has often happened in recent years.
In a worsening scenario in which the Israeli industry is exterminated, the security forces that are forced to use spyware to fight terrorism will be forced to rely on foreign entities that do not operate under Israeli supervision. The issue should be important enough to come up on the table, but it is possible that between Saudi Arabia and the nuclear agreement with Iran, President Biden and Prime Minister Yair Lapid there will be very good reasons not to discuss the matter.