The Atlantic Council has published its second annual report: “Mythical Beasts: Diving into the depths of the global spyware market.”

Too much good detail to summarize, but here are two items:

First, the authors found that the number of US-based investors in spyware has notably increased in the past year, when compared with the sample size of the spyware market captured in the first Mythical Beasts project. In the first edition, the United States was the second-largest investor in the spyware market, following Israel. In that edition, twelve investors were observed to be domiciled within the United States—­whereas in this second edition, twenty new US-based investors were observed investing in the spyware industry in 2024. This indicates a significant increase of US-based investments in spyware in 2024, catapulting the United States to being the largest investor in this sample of the spyware market. This is significant in scale, as US-based investment from 2023 to 2024 largely outpaced that of other major investing countries observed in the first dataset, including Italy, Israel, and the United Kingdom. It is also significant in the disparity it points to ­the visible enforcement gap between the flow of US dollars and US policy initiatives. Despite numerous US policy actions, such as the addition of spyware vendors on the Entity List, and the broader global leadership role that the United States has played through imposing sanctions and diplomatic engagement, US investments continue to fund the very entities that US policymakers are making an effort to combat.

Second, the authors elaborated on the central role that resellers and brokers play in the spyware market, while being a notably under-researched set of actors. These entities act as intermediaries, obscuring the connections between vendors, suppliers, and buyers. Oftentimes, intermediaries connect vendors to new regional markets. Their presence in the dataset is almost assuredly underrepresented given the opaque nature of brokers and resellers, making corporate structures and jurisdictional arbitrage more complex and challenging to disentangle. While their uptick in the second edition of the Mythical Beasts project may be the result of a wider, more extensive data-collection effort, there is less reporting on resellers and brokers, and these entities are not systematically understood. As observed in the first report, the activities of these suppliers and brokers represent a critical information gap for advocates of a more effective policy rooted in national security and human rights. These discoveries help bring into sharper focus the state of the spyware market and the wider cyber-proliferation space, and reaffirm the need to research and surface these actors that otherwise undermine the transparency and accountability efforts by state and non-state actors as they relate to the spyware market.

Really good work. Read the whole thing.