The Opportunity for Israeli Cyber: The US Administration Recruits the Private Market for the Fight Against Crime
The US administration is changing the rules of the game in the fight against cybercrime: a new White House memorandum establishes a program that will allow private American cyber companies to carry out active cyber operations under government supervision.
The US administration is changing the rules of the game in the fight against cybercrime: a new White House memorandum establishes a program that will allow private American cyber companies to carry out active cyber operations against transnational criminal organizations, including intelligence gathering and actions to disrupt, damage, or disable computer systems — all under the control, supervision, and approval of the US government. The move is intended to harness the technological capabilities, speed, and innovation of the private industry to fight fraud, cybercrime, and threats to citizens, businesses, and US security.
As part of the program, which will be managed by the National Coordination Center (NCC), private companies selected to participate will undergo a rigorous screening process and will operate under procedures to be established by the Department of Justice and the Department of Homeland Security. Every action will be required to receive prior written approval and will be carried out on behalf of the US government and under its legal authority. Companies will be able to receive information about threats from private firms and government bodies and use it to propose cyber operations against criminal organizations.
The scope of permitted activity is broad: "cyber surveillance operations" will allow for the collection of information and intelligence from systems without the authorization of their owners, while "cyber influence operations" include manipulation, disruption, prevention, damage, or disabling of information systems and infrastructures. However, the framework stipulates that no action can be approved that is likely to cause death or serious injury, or that would be considered a use of force or an armed attack under international law.
Significance for the Israeli Cyber Industry
For the Israeli cyber industry, the move could be particularly significant. According to Li Moser, founding partner at the Protego fund, one of the most prominent aspects of the memorandum is the explicit reference to small and agile companies as well. "This is the first time we see an American security document that explicitly requires allowing entry to small and agile companies as well, not just the giants," she says. According to her, this is an acknowledgment that "the adversary is advancing at the pace of a startup, so the defense must as well."
The central point for Israeli companies is that the memorandum defines the participating companies at this stage as private American companies. However, according to Moser, here the Israeli industry may have a structural advantage. "A large part of our companies incorporate in the US from the start, unlike markets in Europe and Asia that tend to remain local," she says. According to her, this fact does not constitute an "automatic entry ticket," as the exact criteria for participation will be determined only in procedures that are supposed to be published within 60 days, but it may provide Israeli companies with a better starting point.
Responsibility and AI
Arik Kleinstein, managing partner at Glilot Capital, assesses that the memorandum signals a significant change in how the US government views the role of the cyber industry. However, Kleinstein warns that alongside the business and security opportunity, fundamental questions remain around the division of responsibility and risk. When a private company carries out an active operation against infrastructure in another country, the line between activity against crime and an event with state and diplomatic consequences can be thin.
The American move also has a broader context of the development of artificial intelligence. Gil Geron, CEO and co-founder of Orca Security, believes that the memorandum may be a sign of a broader change in how Western countries deal with cyber threats. According to him, the decision to harness private companies for active activity reflects an understanding that the technological capabilities and speed of the industry are a strategic asset that the state cannot afford not to use.
