The NSO Group, Israel’s cybersecurity firm which gave rise to the infamous Pegasus virus, is facing threats from US blacklists following various controversies over spyware blackmailing of journalists, politicians, and other public figures.

On 15 December, 18 United States members of the Senate and House of Representatives called upon the US Treasury Department and State department to place official sanctions on the NSO Group. 

Previously, on 3 November, the United States Department of Commerce announced that it had placed the NSO on a blacklist on grounds that it had “used [its] tools maliciously through the Pegasus spyware that it produced to spy on various public figures, celebrities, diplomats, and journalists.

At the time, the NSO was joined by another on the US blacklist – the Israeli Candiru company – in being regarded as having acted “contrary to the national security or foreign policy interests of the United States.”

An earlier report from Haaretz detailed how former Israeli prime minister Benjamin Netanyahu had marketed and used spyware as leverage to build intelligence-gathering and to share activities with allies like Saudi Arabia.

A recent Haaretz report emphasized that cooperation between the US intelligence community and the companies Netanyahu was involved in has ended.

The report added that defense and intelligence experts as well as officials foresaw a “shutdown of operations” due to the new sanctions. 

With the NSO Group considering closure, two US fund sources have put forward their intent to purchase the firm in order to eventually shut it down. The deal would see the firms being resold at $200 million and possibly resold for purely cyber-defense purposes.

The US blacklisting of the NSO comes at a time when Saudi Arabia is under increased scrutiny for its role in the Khashoggi killing. The kidnapping of Jamal Khashoggi, and his eventual murder, took place with the help of NSO Pegasus spyware. 

The US government may well be anxious over the sale of spyware around the world, as it would be aware that this spyware may one day be used against it.

Last month, Apple filed a lawsuit against the NSO to prevent it from targeting its devices.

The NSO Group also owes over $500 million in debt and is at risk for default.