NSO is about to sell hacking tools to France. Now this Israeli spyware company is in crisis.

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In most cases, NSO defended itself by saying that it was just building tools and did not control what foreign governments chose to do with Pegasus and continue to do business as usual.

However, a series of revelations in 2021 had a different impact on it.

The “National Bureau of Statistics incident”, like a series of scandals triggered in Israel this year, has caused the company to lose millions of dollars in sales. Earlier this year, reports of widespread abuse made headlines around the world, but the company stated that these allegations were based on the mischaracterization of the standard phone number database as a spy target for the NSO Group.

Compared with previous scandals, US sanctions have had a direct and greater impact on companies. Bloomberg reported that Wall Street is avoiding NSO and treating it as a bad asset; at the same time, the company’s new CEO resigned only a week after taking office.

The sanctions place practical restrictions on the way companies operate. For example, without the express approval of the US government, it cannot legally purchase many tools for exploiting exploits, such as laptops or iPhones with Windows operating systems. The United States has stated that its default decision on NSO Group sales will be negative.

The US decision also had a deeper impact on the company. According to several MIT technology commentators who asked not to be named, morale is low and employees feel frustrated and confused. If the NSO cannot leave the list of American entities, the highest level will have real and serious doubts about its future.

Strategic issues

The connection between the National Bureau of Statistics and the Israeli leadership also complicates the situation. Like many weapons manufacturers, the NSO Group has close ties with its government and has proven to be an important political and diplomatic tool for Israel in the past decade. According to people familiar with the matter, when the NSO Group began selling hacking tools to the government of the United Arab Emirates, Benjamin Netanyahu, then Prime Minister of Israel, specifically urged a deal to be concluded.

In fact, Israel’s strategic plan to develop closer relations with its neighbors (neighbors that historically did not recognize Israel’s existence) is supported by NSO’s hacking technology, which is highly sought after by countries in the region. Pegasus has been used as a trading sweetener to strengthen Israel’s relations with countries such as the United Arab Emirates, Morocco, and Bahrain.


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