A hooded man holds a laptop computer as blue screen with an exclamation mark is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration.

i24 News – Israel’s Defense Ministry drastically scaled back the list of countries that cyberware firms can sell to, it was reported Thursday, as fallout from the NSO Group scandal continues to reverberate.

The original list of 102 permitted states was reduced to just 37, with Israel’s new allies Morocco and the UAE barred, Calcalist reported.

Most of the countries approved for cyber sales are European nations, as well as the US, Canada, India, Japan, South Korea, and Australia.

All are reportedly democratic states — possibly a reaction to the perception that Israeli offensive cyber firms were disproportionately selling their technologies to authoritarian regimes that targeted human rights advocates and journalists.

The report indicates that the reduction of the approved list by around two-thirds is likely to be a serious blow to one of Israel’s most prestigious export industries.

Thursday’s report comes on the heels of back-to-back bad news for NSO Group.

On Tuesday Apple announced that it would sue the offensive cyber company for “surveillance and targeting of Apple users.”

And at the start of the month, NSO — along with a second Israeli cyber company, Candiru — was blacklisted by the US government for “activities contrary to national security and the foreign policy interests of the United States.”

It leaves the future of the high-tech business, that until recently was examining options for an IPO, in doubt, with NSO’s newly appointed CEO walking away from the company two weeks into assuming his promotion.