Exclusive: Israeli cyberattack company Quadream has summoned many of its employees to a hearing tomorrow ahead of being laid off after some of them were told that the company is expected to close, sources have told "Globes." After the layoffs, a small number of employees will remain at the company to oversee its closure. The Ramat Gan-based spyware company, whose activities are shrouded in mystery, has an estimated 40 employees. The company's spyware is used to breach iPhones and it is a big rival of fellow Israeli cyberattack company NSO Group.
Aspects of the company were revealed for the first time last month when it responded with a defense letter to the Bat Yam Labor Court to a lawsuit brought against it by a former employee. In the letter Quadream revealed that like the entire cyberattack industry it is in a crisis which has required it to dismiss employees in recent months. The company said that the upheaval in the sector had followed media exposure.
In its letter to the court, Quadream wrote, "The crisis in the industry began due to the public disclosure of the activities of some of the companies from 2018 onwards, which resulted in the fact that in November 2011 the US Chamber of Commerce put NSO and Candiru on its blacklist. Immediately after that, at the start of 2022, the regulator in Israel decided to reduce the number of countries to which it is allowed to sell the companies' products in the industry from 102 to only 37, which caused a severe economic crisis in the entire industry."
Quadream also claimed last month that in November 2022 there was a serious negative business development in its business that damaged cash flow. "In order to avoid the fate of other companies in the industry (such as Nemesis and Cognyte's cyberattack division that have already been closed) the company had to make significant cuts in its workforce - in a deep and painful round of layoffs, the company fired many of its employees, including some of the company's most senior managers." Rival NSO also led a round of layoffs last summer of about 150 employees.
Quadream focuses only on iPhones, unlike NSO which can also breach Android phones. Quadream has developed a tactical product - an integrated software and hardware system that allows taking over local networks so that it can hack the phones connected to it. The company has also developed a software product that allows remote control of phones. The takeover is completed in two ways: the first is encouraging the user to click on a link that looks innocent, but it is an "attack link" that breaches the phone with Trojan horse software that extracts information from the device. The second means is to calibrate the network traffic (HTTP traffic) so that when connecting to a certain address the device will be breached by the Trojan horse software.
Quadrim was technologically many years behind NSO in its inability to breach contactless devices, but its ability to calibrate network traffic at will strengthened its position in the cyberattack industry. The company was founded by Nimrod Reznik and Ilan Dabelstein, who serve as two of the company's senior managers to this day.
Quadream has yet to respond to this report.
Published by Globes, Israel business news - en.globes.co.il - on April 16, 2023.
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