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Embattled NSO said considering closing its Pegasus unit, selling to Americans

Tech firm behind the contentious spyware is reportedly at risk of defaulting on its debt, and is seeking an outside injection of capital and a business pivot to keep it afloat

FILE - In this Tuesday, Aug. 24, 2021, file photo, a logo adorns a wall on a branch of the Israeli NSO Group company, near the southern Israeli town of Sapir. Apple released an emergency security software patch to fix a vulnerability that an internet watchdog group says allowed spyware from the world’s most infamous hacker-for-hire firm, NSO Group, to infect the iPhone of a Saudi activist without any user interaction. (AP Photo/Sebastian Scheiner, File)
FILE - In this Tuesday, Aug. 24, 2021, file photo, a logo adorns a wall on a branch of the Israeli NSO Group company, near the southern Israeli town of Sapir. Apple released an emergency security software patch to fix a vulnerability that an internet watchdog group says allowed spyware from the world’s most infamous hacker-for-hire firm, NSO Group, to infect the iPhone of a Saudi activist without any user interaction. (AP Photo/Sebastian Scheiner, File)

The NSO Group, the controversial technology company recently blacklisted by the United States over the illegal use of its spyware, is reportedly considering shutting down its Pegasus operation and selling the entire company to an American investment fund,  Bloomberg reported on Monday.

The report, citing officials involved in the talks, said that there are two potential suitors for the embattled company, who have discussed a potential takeover and the shuttering of Pegasus unit, in exchange for a $200 million injection of capital and a pivot into strictly defensive cybersecurity services.

NSO declined to comment on the report.

The Pegasus software was the flagship of the firm and was considered one of the most powerful cyber-surveillance tools available on the market. The unit responsible for the technology accounted for about half of NSO’s revenue, according to Bloomberg.

The technology was used to target journalists, activists and politicians in dozens of countries, as revealed in a major in-depth investigation by major media outlets and nonprofits around the world.

According to the reporting, more than 1,000 people across over 50 countries were traced to numbers on the list, including several heads of state, and prime ministers, Arab royal family members, business executives, 85 human rights activists, 189 journalists, and more than 600 politicians and government officials.

The ensuing fallout has greatly affected the company, which was at risk of defaulting on about $500 million of debt, and had its credit rating take a dramatic hit, leading to issues of solvency within the company.

Furthermore, the tech behemoth Apple sued NSO for targeting the users of its devices, and sought a permanent injunction against NSO Group using any of its products.

While the company maintained that the software was only meant to assist countries in fighting crime and terrorism, and despite the Israeli government lobbying on its behalf, the US Department of Commerce nevertheless blacklisted NSO and a second company, Candiru.

The decision to blacklist NSO came apparently after its software was used to target US diplomats working in Uganda.

The Pegasus technology had the ability to allow operators to effectively take full control of a target’s phone, download all data from the device, or activate its camera or microphone without the user knowing.

In December, the Defense Ministry imposed new restrictions on the export of cyber-warfare tools following the major international backlash over the use of Israeli-made surveillance software such as Pegasus.

The Defense Ministry also dramatically scaled back the number of countries to which Israeli companies are allowed to sell cyber technologies, a list that consisted of 37 countries, which was down from 102 originally.

 

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