US Spyware Investment Soars to Record Highs
▼ Summary
– The United States is now the largest global investor in commercial spyware, with 31 American backers identified as of 2024.
– US-based investors include major firms like D.E. Shaw, Millennium Management, Jane Street, and Ameriprise Financial, which have funded Israeli spyware provider Cognyte.
– A notable recent US investment was AE Industrial Partners’ acquisition of Israeli spyware vendor Paragon Solutions, whose contract with ICE was reactivated in late 2024.
– Paragon has been linked to alleged misconduct, including targeting journalists and human rights defenders in Italy and other countries, as confirmed by Citizen Lab.
– The global spyware market is expanding, with the Atlantic Council identifying new vendors, resellers, suppliers, and individuals connected to the industry.
The United States now stands as the world’s leading financial backer of commercial spyware, a rapidly expanding sector linked to covert surveillance operations targeting journalists, activists, political figures, and diplomats. This surge in investment raises significant alarms regarding human rights and national security, as powerful monitoring tools increasingly fall into the hands of both state and private actors.
A recent study by the Atlantic Council reveals that American involvement has grown dramatically, with 20 new US-based spyware investors identified in 2024 alone, bringing the nationwide total to 31. This expansion has significantly outpaced investment activity in other major players, including Israel, Italy, and the United Kingdom.
The comprehensive report analyzed 561 entities across 46 countries over more than three decades, identifying 34 new investors globally since last year’s findings. The updated total now reaches 128 financiers backing spyware development and distribution. Within the European Union and Switzerland, 31 investors were cataloged, with Italy, recognized as a key hub for surveillance technology, accounting for nearly a third of that figure. Israel-based investors number 26.
Notable US financial firms participating in this sector include hedge funds D.E. Shaw & Co. and Millennium Management, trading firm Jane Street, and financial services group Ameriprise Financial. According to the report, these entities have directed funding toward Cognyte, an Israeli company producing lawful interception software. Cognyte has faced allegations of involvement in human rights violations in countries such as Azerbaijan and Indonesia.
In another significant development, Florida-based private equity firm AE Industrial Partners acquired Israeli spyware vendor Paragon Solutions in late 2024. Paragon recently returned to public attention when its contract with US Immigration and Customs Enforcement (ICE), first reported months earlier, was unexpectedly reinstated after a prolonged suspension.
Civil liberties organizations have condemned the renewal, describing it as “extremely troubling” and warning that it intensifies concerns over the expanding power and budget of immigration enforcement agencies.
Paragon has also been implicated in surveillance controversies in Europe. WhatsApp reported that Italian journalists and civil society members were targeted using Paragon’s tools, and a parliamentary investigation concluded that the Italian government deployed the company’s Graphite spyware specifically against human rights advocates. Researchers from the University of Toronto’s Citizen Lab corroborated these findings, identifying a targeted Italian journalist and potential Paragon clients in Australia, Canada, Denmark, Cyprus, Singapore, and Israel.
In response, Paragon criticized Italian authorities for what it called a refusal to conduct proper technical verification, suggesting that such an analysis could have clarified the situation.
Beyond tracking financial flows, the Atlantic Council notes that the spyware ecosystem is diversifying and growing. The updated dataset now includes four new vendors, seven new resellers or brokers, ten new suppliers, and 55 individuals newly associated with the industry.
Among the recently identified vendors are Israel’s Bindecy and Italy’s SIO. Resellers include front companies tied to NSO Group products, such as Panama’s KBH and a Mexican firm highlighted by that country’s government. New suppliers named in the report include UK-based Coretech Security and ZeroZenX from the UAE.
(Source: Wired)