Paragon Solutions is an Israeli startup building one of the most powerful cyber weapons in the world – made a smart move A: Before looking for customers, he got the support of the United States.

The company did not want to repeat the fate of its local competitor NSO Groupmaker of controversial spyware Pegasus, which has been blacklisted in the US. So Paragon turned to top American advisors for advice, raised funding from US venture capital funds, and ended up winning a prestigious client that its competitor doesn’t have: the US government.

The US Drug Enforcement Agency (DEA) is one of the top buyers of Paragon’s branded Graphite product, according to six industry sources.

This malware surreptitiously infiltrates secure smartphones and bypasses the encryption of instant messengers like Signal or WhatsApp, sometimes extracting data from cloud backups, just like Pegasus does.

Paragon was founded by Ehud Schneorson, former commander of the elite Israeli army radio intelligence unit Unit 8200. The company’s board of directors includes former Israeli Prime Minister Ehud Barak. The company received investments from two American venture funds: Battery Ventures and Red Dot.

In 2019, before Graphite was completed, on the advice of a retired Mossad senior official, Paragon hired WestExec Advisors, a Washington-based consulting firm that employed former Obama White House staffers including Michelle Flournoy, Avril Haynes, and Anthony Blinken. Former US Ambassador to Israel Dan Shapiro was also consulted, according to people with knowledge of the consulting work.

WestExec stated that he “advised Paragon on its strategic approach to the US and European markets, and on the formation of its industry-leading ethical commitment to ensure the appropriate use of technology”, adding that it is “proud of its contributions to these critical areas “.

Gaining US approval, even indirectly, was at the heart of Paragon’s strategy. The company requested a list of allied countries to which the US would not object to the sale of Graphite. Experts suggested that this list includes 35 countries. Most of them are in the EU and some in Asia.

This contrasts with recent NSO issues. By 2019, NSO had become a $1 billion company, selling its product to Saudi Arabia, Mexico and dozens of other countries.

By the time the Biden administration came to power, the NSO was faced with the fact that its lucrative clients had become its Achilles’ heel, as many of these regimes continued to use multi-million dollar weapons against journalists, dissidents, and opposition leaders.

As evidence of abuse spread, such as the spying on US diplomats in Uganda in 2021, the NSO has found itself in the crossroads of both the US government and major technology companies.

“There is a growing sense that this particular type of malware is so invasive, so stealthy, that its distribution poses both a human rights risk and a counterintelligence risk to the US,” said Stephen Feldstein, who has studied the distribution of spyware such as Pegasus. and Graphite, for the Carnegie Endowment.

For nearly a decade, the only restriction for some of the biggest spyware makers has been Israeli export controls, which regulate malware like Pegasus as a weapon. Feldstein said Israeli officials “make decisions based on geopolitical decisions, not human rights violations.” However, Paragon’s founders were more sensitive to the increasingly bleak US view of cyberweapon proliferation.

After NSO malware was found on the phones of associates of slain Saudi columnist Jamal Khashoggi, Paragon refused Israeli government requests to replace Pegasus with Graphite in the Saudi arsenal.

Paragon’s decision to turn down a lucrative Saudi contract eventually paid off. Two other Israeli companies, Quadream and Candiru, which sold similar hacking capabilities to the Saudi government, were exposed by Microsoft and human rights group Citizen Lab after their malware was used against journalists and dissidents. Candiru was blacklisted along with the NSO in November 2021. Quadream recently went out of business, Israeli newspaper Calcalist reported.

The U.S. has stepped in even more in the process of reshaping the spyware market to give preference to those who sell cyber weapons the US and its allies, while deterring those who pursue lucrative contracts with authoritarian regimes.

President Joe Biden signed an executive order in March, banning any U.S. agency from buying spyware that “poses a threat to national security or has been used by foreign governments to commit human rights abuses around the world.”

The wording of the executive order is seen by experts as being directed against the NSO, while providing space for companies like Paragon to continue selling similar spyware, but only to close US allies. The American expectation is that friendly nations are less likely to misuse such weapons against civil society or spy on US government officials working abroad.