American Airlines and JetBlue face a federal antitrust suit over their alliance.

The Justice Department said the partnership amounted to a merger in the New York and Boston markets and reduced competition more widely.

S&P 500







American Airlines jets at the Boston airport. The Justice Department said an airline alliance had harmed consumers in Boston and New York.Credit…Steven Senne/Associated Press

The Justice Department filed an antitrust suit on Tuesday against American Airlines and JetBlue, saying a growing alliance between the two carriers had created a “de facto merger” in the New York and Boston markets, reducing competition and hurting consumers.

The suit said the arrangement between the airlines reduced the incentive for them to compete in the Northeast and elsewhere and would “cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice.”

The Justice Department said attorneys general in six states and the District of Columbia were joining in the action.

“This sweeping partnership is unprecedented among domestic airlines and amounts to a de facto merger,” the department said.

The airlines rejected the accusations. American said the alliance was “already providing more choices and better service for customers.” JetBlue said that through the partnership, the two airlines “create a true third competitor to Delta and United” in the New York market.

This is a developing story. Check back for updates.

Erin Griffith (@eringriffith) and Erin Woo (@erinkwoo), two of our tech reporters, are covering the trial of Elizabeth Holmes, who dropped out of Stanford University to create the blood testing start-up Theranos at age 19 and built it to a $9 billion valuation and herself into the world’s youngest self-made female billionaire — only to flame out in disgrace after Theranos’s technology was revealed to have problems.

Follow along here or on Twitter as she is tried on 12 counts of wire fraud and conspiracy to commit wire fraud. The trial is generally held Tuesdays, Wednesdays and Fridays.

Erin Griffith

Oh my, Theranos offered Zachman a “corrected” version of the results which simply removed a decimal point but the she says numbers still wouldn’t have made sense within the context of a viable pregnancy or a loss of one.

Erin Griffith

“This circumstance was very impactful to me as it stood out as such a red flag for the pregnancy.”

Erin Griffith

Gould took 5 blood tests, 3 from a subsidiary of Quest Diagnostics and 2 from Theranos. She went on a rollercoaster, with the Quest test showing she was pregnant, the two Theranos tests showing a miscarriage, and 2 more Quest tests showing she was indeed still pregnant.

Erin Griffith

Zachman describes the case of a patient named Brittany Gould (sp?) who had had 3 miscarriages. She came to see Gould after a positive at-home pregnancy test “to establish that yes, she is pregnant and look at the health of the pregnancy.”

Erin Griffith

Zachman was on a committee that evaluated service providers and her practice adopted Theranos blood tests around 2014.
Theranos even set up a lab downstairs from one of her practice’s offices, which Zachman said was “very exciting.”

Wall Street fell for a fourth straight day on Tuesday, adding to its
worst decline in months after a day of turbulent trading.

After swinging between gains and losses, the S&P 500 ended the day marginally lower. On Monday, the index dropped 1.7 percent, its sharpest fall since May, as fears of a potential default at the property giant China Evergrande Group sent shock waves through global markets.

The Stoxx Europe 600 rose 1 percent on Tuesday, rebounding from a 1.7 percent slump the previous day. In Asia, the Hang Seng index in Hong Kong rose 0.5 percent after dropping 3.3 percent on Monday.

Yields on government bonds rose as investors sold some of their safer assets. The yield on 10-year Treasury notes rose one basis point, or 0.01 percentage points, to 1.32 percent. Oil prices also rose, with West Texas Intermediate, the U.S. crude benchmark, ticking up 0.3 percent to $70.51 a barrel.

The trigger for this week’s decline was rising concern about Evergrande, one of China’s biggest developers. The company is saddled with enormous debts that it is unlikely to be able to pay without government support. Evergrande has an interest payment of more than $80 million due this week, and so far, there is little indication Beijing will come to its rescue.

For global investors, the worry is that a collapse of a company of Evergrande’s size could ripple through the Chinese economy and beyond. Analysts at Mizuho, a Japanese bank, said Evergrande was a casualty of the Chinese government’s policy goals of reducing inequality, “where a property market rally is therefore undesirable.” And so, China is imposing tight credit conditions to rein in risky borrowing habits of property developers.

These measures could slow China’s economy and reduce consumer demand for foreign goods, a risk that had not been fully considered by investors in American and European stock markets, the analysts said.

But Wall Street has been uneasy for weeks. The S&P 500 touched a record high on Sept. 2 and has steadily declined since then. It has dropped by a small amount nearly every day, and with Monday’s swoon included that adds up to a 3.7 percent slide for the index so far in September. Should the losses hold, this will be the first monthly decline for the index since January and its worst monthly showing in a year.

Chief among investors’ concerns is what the Federal Reserve might say on Wednesday about its plans to scale back its enormous bond-buying program. The purchases have helped prop up the economy and the stock market during the pandemic, and some analysts expect that investors will be in more of a buying mood once the central bank releases its latest policy statement on Wednesday afternoon.

The Fed is also expected to update its quarterly projections for growth, unemployment and inflation through 2024, and those could help investors reset expectations for the withdrawal of economic support or eventual interest rate increases.

“Markets are already expecting a faster pace of rate hikes than what the Fed itself has been saying,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. “If we get a hawkish tilt from those 2024 projections, hypothetically the market has already caught up to that.”

Also weighing on sentiment is the U.S. debt limit. Treasury Secretary Janet L. Yellen warned this month that the United States could default on its debt in October if Congress did not raise or suspend the debt limit. She said that the exact timing remained unclear but that time to avert an economic catastrophe was running out.

The House is expected to take up legislation on Tuesday that would lift the limit on federal borrowing through the end of 2022, a measure largely opposed by Republicans.

Key economic gauges have also weighed on investor sentiment over the month. The Consumer Price Index rose 5.3 percent in August from a year earlier, the Labor Department reported last week — gains that could keep pressure on the Fed to start withdrawing its support for the economy sooner rather than later.

U.S. consumer sentiment rose 1 percent in September, but the small gain still placed the index at its lowest level in more than a decade, according to preliminary data from the University of Michigan’s gauge of consumer sentiment. Retail sales have also been swinging month over month, with consumer spending rising slightly in August, the Commerce Department reported last week, after a sharp decline in July.

A map at an Evergrande development in Beijing showing the company’s projects across the country.Credit…Andy Wong/Associated Press

Shares of China Evergrande, the troubled real estate giant whose fate has contributed to jitters in global markets, fell again on Tuesday amid a new prediction that it would soon default.

The company’s chairman, Xu Jiayin, told employees in a letter quoted in Chinese media that Evergrande would surmount its problems, which include $300 billion in debt, plunging sales of apartments and a payment due Thursday.

“I firmly believe that Evergrande will walk out of its darkest moment and resume full-speed work and production,” he said in the letter, which was confirmed by a company spokesman.

But a dire forecast about the company’s fate arrived on Tuesday for investors in Asia, this one from S&P Global Ratings. “We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy,” said the report, which was dated Monday.

Both the company’s shares and its bonds fell on Tuesday, though by more modest amounts than in recent days and weeks. Its shares closed 0.4 percent lower, and shares of other Chinese-focused developers that tumbled on Monday recovered some of their losses. Hong Kong’s Hang Seng Index, which fell 3.3 percent on Monday, ended the day with a 0.5 percent gain.

The impact of an Evergrande collapse would depend in large part on the attitudes of China’s top leaders.

Many of Evergrande problems stem from new restrictions on home sales as Beijing tries to tame real estate prices and address rising concerns about the price of homes. The government has also sought to teach a lesson to developers who borrowed heavily in recent years to build more properties and finance their investments in other businesses. (In the case of Evergrande, those include interests that include electric cars and a soccer team.)

But a hard landing for Evergrande, should it default, carries risks. Unhappy home buyers and suppliers could cause unrest, while the financial impact on investors and others who might be exposed to Evergrande could be costly.

Beijing, however, has a number of ways to try to stop a financial disaster. The government controls the banks and the financial ties between them. It also firmly controls the flow of money across the country’s borders, allowing it to stem a potential rush of funds outside the country.

“The officials still have some tools at their disposal to calm down the panic,” said Zhiwu Chen, a professor of finance at the University of Hong Kong, who predicted the authorities would break up the company and sell its parts piecemeal.

The authorities also can control media coverage, while the police have considerable powers to detain anybody who raises a public fuss.

Zoom has its headquarters in San Jose, Calif., but concerns have been raised about ties to China.Credit…Smith Collection/Gado/Sipa USA

A federal panel has asked to review Zoom’s purchase of Five9, an American company that makes call center software, over potential national security concerns, according to a government filing.

In an August request to the Federal Communications Commission, the Justice Department said a review was needed to figure out “whether this application poses a risk to the national security or law enforcement interests of the United States.” It said it was concerned about the risk that “may be raised by the foreign participation” associated with the deal.

The Justice Department asked the F.C.C. to refer Zoom’s roughly $15 billion acquisition of Five9 to a committee established to review the security risks posed by telecommunications deals. In addition to the Justice Department, the committee includes representatives of the Departments of Homeland Security and Defense.

The request follows concerns that Zoom, which is based in California, is too close to the Chinese government. Last year, federal prosecutors indicted a Zoom executive on a charge of collaborating with Beijing to disrupt virtual events commemorating the anniversary of the Tiananmen Square massacre. Both the Trump and Biden administrations have put pressure on Chinese technology companies, arguing that their products could give the Chinese government a direct line to sensitive American personal data and critical infrastructure.

The Wall Street Journal earlier reported the Justice Department’s request.

In a statement on Tuesday, a spokesman for Zoom said it expected the deal with Five9 to close in the first half of next year.

“We have made filings with the various applicable regulatory agencies, and these approval processes are proceeding as expected,” the Zoom spokesman said. Allison Wilson, a spokeswoman for Five9, declined to comment.

The F.C.C. also declined to comment. The Justice Department did not immediately respond to a request for comment.

Alyson Shontell, 35, was a co-editor in chief of Insider’s business section.Credit…Roy Rochlin/Getty Images

Fortune on Tuesday named Alyson Shontell as its new editor in chief, the first woman to hold the role in its 92-year history.

Ms. Shontell, 35, joins from the digital media company Insider, where she was a co-editor in chief of the business section. She will start on Oct. 6.

Alan Murray, the chief executive of Fortune, said in an email newsletter that Ms. Shontell would be in charge of content across Fortune’s magazine and website, as well as its conferences, newsletters, videos and podcasts and the Fortune Connect platform, an online community for executives.

“Alyson is the perfect person to position Fortune for its second century,” he wrote, citing Ms. Shontell’s love of journalism and her digital chops. “As employee number six at Business Insider, she helped shape and build the most successful pure play digital business journalism franchise of our time.”

She replaces Clifton Leaf, who stepped down from the editor in chief job in June. Brian O’Keefe has been the acting editor.

Fortune joins a raft of media outlets that now have women as their top editors, a rank historically dominated by men. The Washington Post named Sally Buzbee as its executive editor in May. She was replaced in her previous role, executive editor of The Associated Press, by Julie Pace. Last week, Axios named Sara Kehaulani Goo as its editor in chief and Aja Whitaker-Moore as its executive editor.

Mike Manley will be charged with continuing AutoNation’s growth as auto retailing is rapidly shifting from the showroom to online sales.Credit…Jonathan Ernst/Reuters

AutoNation, the automotive retail giant, has named Mike Manley, the former chief executive of Fiat Chrysler, as its chief executive, replacing Mike Jackson, who is retiring after running the company for most of the last 22 years.

Mr. Manley, 57, will start Nov. 1 at AutoNation, which operates more than 300 dealerships across the country. He will be charged with continuing the company’s growth as auto retailing is rapidly shifting from the showroom to online sales, and electric vehicles are changing how consumers interact with their cars and dealers.

“We have built an admired and respected company from coast to coast,” Mr. Jackson, 72, said in a statement. “I have every confidence Mike Manley will lead AutoNation to an even brighter future.”

Mr. Manley grew up in England and worked in a dealership before studying engineering. In 2000, he joined Chrysler — then part of DaimlerChrysler — and rose to head the Jeep brand through a period of rapid growth, playing other key roles as the automaker became Fiat Chrysler.

He was named chief executive of Fiat Chrysler in 2018, and held that post until the company merged with the French automaker Peugeot to become Stellantis. Mr. Manley headed the merged company’s North American operations but was considered unlikely to become its chief executive. He did not take part in a recent daylong strategy presentation that featured talks by more than a dozen top Stellantis executives.

Mr. Jackson turned AutoNation into a consistent profit-maker and a powerful influence in the auto industry. He stepped down as chief executive in 2019, but returned to the job less than a year later when two successors left the company after short stints.

During his tenure, AutoNation became the largest retailer of many vehicle makers, including Ford Motor and Mercedes-Benz, giving the company considerable sway over the policies and strategies of several large manufacturers.

Universal Music is the world’s largest music company, boasting a roster that includes Taylor Swift, Drake and Billie Eilish.Credit…Mario Anzuoni/Reuters

Vivendi spun off Universal Music on the Amsterdam stock exchange on Tuesday, and investors liked the sound of it: Shares jumped around 40 percent at the open, valuing the record label at more than $50 billion, and held mostly steady through the close of trading.

Universal is by far the world’s largest music company, holding a 31 percent market share and boasting a roster of major stars, including Taylor Swift, Drake and Billie Eilish.

The successful debut of a player in a once unloved industry, defying a jittery market, could change the tune for others in the wider entertainment world, the DealBook newsletter reports.

The music industry had been all but written off not that long ago, with digital downloads (and piracy) eroding lucrative physical sales. But Universal, led by the power broker Lucian Grainge, leaned into the trends and made big bets on streaming, social media and other areas:

A 2013 deal with Apple helped the tech giant start its music service two years later.

Its 2017 deal with Spotify put the streaming pioneer on the path to going public.

Universal was the first major music company to sign with Facebook, also in 2017.

The label has recently shored up its publishing library, buying Bob Dylan’s back catalog for about $300 million last year.

The bets appear to have paid off: Universal Music has averaged double-digit growth in sales and profits over the past two years, and expects this to continue in 2021. The company now generates nearly 70 percent of its revenue from streaming and publishing.

There was some drama in the spinoff process, mostly coming from the hedge fund manager William A. Ackman. The billionaire’s hedge fund, Pershing Square, has a 10 percent stake in Universal Music, though not in the way he originally hoped. His plan to invest in Universal via his special-purpose acquisition company fell through when the Securities and Exchange Commission took issue with its structure — his logic, however, was validated by the big pop in the company’s value. (That’s good for Pershing Square’s hedge fund investors, but not for its SPAC shareholders.)

Other major investors in Universal Music include the Chinese gaming firm Tencent (20 percent) and the French billionaire Vincent Bollore (18 percent).

China is a part of Universal’s growth plan and is one of the reasons that the label brought in Tencent as an investor. The risks of doing business in the country have become more stark lately, and the authorities there have made clear that Tencent is under scrutiny in a broader tech crackdown. In 2019, Universal Music was contacted by Chinese officials investigating market competition in the music industry.

A house in Los Angeles outfitted with rooftop solar panels.Credit…Philip Cheung for The New York Times

Fearing that growth in California’s solar power sector could grind to a halt, the association representing the industry has sued the state over a new requirement that installers be “certified electricians.”

In the lawsuit, which was filed on Friday, the California Solar and Storage Association asked the Superior Court of California in San Francisco to overturn the rule changes and allow the current training standards to remain in place for those who install increasingly popular solar panels and battery systems.

“This is devastating to California’s solar industry and the state’s ability to build a clean energy future,” Bernadette Del Chiaro, executive director of the association, said in an interview. “What they’re saying is this stuff is so dangerous that only certified electricians can do it. We don’t have any evidence, a shred of evidence, that there’s a problem.”

Ms. Del Chiaro said the new rules would affect hundreds of solar companies in the state and 35,000 workers. And with electricians already in high demand for construction projects and other services, finding enough people who meet the requirement, she said, will make it nearly impossible for solar and battery companies to deliver their products.

In two rule changes in July, the Contractors State License Board voted to require workers who install solar panels and batteries to be certified electricians to ensure the safe installation of equipment involving power. Utility companies are exempt from the requirement, which takes effect Nov. 1.

Joyia Emard, a spokeswoman for the licensing board, declined to comment on the lawsuit.

California by far leads the nation in solar installations, driven in part by former Gov. Arnold Schwarzenegger’s push for solar panels to be on a million homes — a goal the state reached in December 2019 — and by efforts to replace fossil fuel power plants with large-scale solar farms and other clean energy resources to address the impact of climate change.

Solar panels now sit atop roofs, desert sands and agricultural fields from coast to coast, though the power source provides less than 4 percent of electricity production nationwide. In a report this month, the Energy Department said that solar power could help achieve President Biden’s carbon-reduction goals, but that the nation would need as much as 45 percent of its electricity from the sun.

In California, rooftop panels make up about 50 percent of the state’s solar market, and the installers are almost three-quarters of the industry’s work force, Ms. Del Chiaro said.

Rooftop solar and batteries have become increasingly popular as extreme weather events related to climate change, including wildfires and brutally high temperatures, have led to blackouts and power shut-offs.

The rooftop solar industry is also fighting with utility companies in California over the compensation that consumers receive for the electricity their systems provide to the electric grid. Utilities want to add more fees while cutting the credit that consumers receive, known as net metering, by as much as 80 percent from the current dollar-for-dollar benefit.

The net metering issue is under review by the California Public Utilities Commission.

With the license board rule change, Ms. Del Chiaro said California appeared to be moving in the opposite direction of the state and nation’s climate objectives.

“It is entirely unjustified,” she said.

The Soles4Souls warehouse in Alabama is suffering shortages of footwear as manufacturers that donate inventory keep more of it in a frantic bid to satisfy retail customers.Credit…Audra Melton for The New York Times

Two years into a relentless pandemic, the world economy remains awash in logistical difficulties. Factories in Asia are struggling to satisfy demand for their products. Ports are short of shipping containers and healthy hands to unload them. Trucks are idled for lack of drivers, with warehouses overwhelmed by goods.

And the continuing disruption to factory production and bottlenecks in shipping are leaving nonprofit groups short of goods for vulnerable communities worldwide, Peter S. Goodman reports for The New York Times.

In Haiti, one of the world’s poorest countries, an effort to increase household incomes is confronting a new problem stemming from the upheaval — a shortage of shoes.

The Haitian American Caucus, a nonprofit organization, imports donated, used shoes from the United States and sells them at low-cost to women who hawk them on sidewalks and in markets, earning crucial cash for their families.

The caucus is distributing almost 100,000 pairs of shoes a month, but it could manage four times as many if only more inventory arrived, said its executive director, Samuel Darguin.

“That pair of shoes represents so much more,” he said. “It represents a mother being able to send a kid to school, being able to afford health care and feed her family maybe two meals a day instead of one.”

U.S. Bancorp said on Tuesday that it would acquire MUFG Union Bank, a regional bank owned by Japan’s Mitsubishi UFJ Financial Group in an $8 billion deal. The acquisition will give U.S. Bancorp a network of branches in California, Washington and Oregon, U.S. Bancorp said in a statement.

Google said on Tuesday that it would buy a sprawling Manhattan office building on the Hudson River waterfront for $2.1 billion, expanding the tech giant’s presence in New York and providing a jolt of optimism for a city hammered by the pandemic. The purchase price of the building, the St. John’s Terminal, is one of the largest for a building in the United States in recent years and comes after Google has acquired other large properties in Manhattan, piecing together a sizable East Coast campus for the company.

Royal Dutch Shell sold its oil and gas production in the Permian Basin, the biggest American oil field, to ConocoPhillips for $9.5 billion in cash on Monday. The deal marks a turning point for Shell, which had put considerable effort into developing the field since buying acreage from Chesapeake Energy nine years ago, expanding its production to about 200,000 barrels a day. The sale is also the latest sign that Shell, like other European oil companies, is under pressure to sell off oil and gas production and move toward producing cleaner energy in response to growing concerns about climate change among investors and the general public.

Activision Blizzard, the video game maker behind Call of Duty and other major franchises, said on Monday that the Securities and Exchange Commission was investigating the company over “disclosures regarding employment matters and related issues.” A press officer for Activision said the S.E.C. had issued subpoenas to the company and several current and former employees, but did not offer more details on the focus of the investigation. The company is cooperating with the inquiry, the official said in an emailed statement.

Speaker Nancy Pelosi at the Capitol on Tuesday.Credit…Stefani Reynolds for The New York Times

The House is expected on Tuesday to pass legislation that would keep the government funded through early December, lift the limit on federal borrowing through the end of 2022 and provide about $35 billion in emergency money for Afghan refugees and natural disaster recovery, setting up a clash with Republicans who have warned they will oppose the measure.

The bill, which Democrats released on Tuesday just hours before a planned vote, is needed to avert a government shutdown when funding lapses next week and avoid a first-ever debt default when the Treasury Department reaches the limit of its borrowing authority within weeks. But it has become ensnared in partisan politics, with Republicans refusing to allow a debt ceiling increase at a time when Democrats control Congress and the White House.

In pairing the debt limit raise with the spending package, Democrats hoped to pressure Republicans into dropping their opposition. But few, if any, Republicans are expected to support it.

And the prospects for passage in the 50-50 Senate appeared dim amid widespread opposition by Republicans, who have said they will neither vote for the legislation nor allow it to advance in the chamber, where 60 votes are needed to move forward.

The legislation would extend government funding through Dec. 3, buying more time for lawmakers to negotiate the dozen annual spending bills, which are otherwise on track to lapse when the new fiscal year begins on Oct. 1. The package would also provide $6.3 billion to help Afghan refugees resettle in the United States and $28.6 billion to help communities rebuild from hurricanes, wildfires and other natural disasters.

“It is critical that Congress swiftly pass this legislation to support critical education, health, housing and public safety programs and provide emergency help for disaster survivors and Afghan evacuees,” said Representative Rosa DeLauro of Connecticut, the chairwoman of the Appropriations Committee.

But the decision by Democratic leaders to attach it to legislation lifting the federal debt limit through Dec. 16, 2022 could ultimately jeopardize a typically routine effort to stave off a government shutdown, heightening the threat of fiscal calamity.

Led by Senator Mitch McConnell of Kentucky, the minority leader, Republicans have warned for weeks that they had no intention of helping Democrats raise the limit on the Treasury Department’s ability to borrow. While the debt has been incurred with the approval of both parties, Mr. McConnell has repeatedly pointed to Democrats’ efforts to push multi-trillion-dollar legislation into law over Republican opposition.

Democrats, who joined with Republicans during the Trump administration to raise the debt ceiling, have argued that the G.O.P. is setting a double standard that threatens to sabotage the economy. Should the government default on its debt for the first time, it would prompt a financial crisis, shaking faith in American credit and cratering the stock market.

Republicans have said that they would support the package on its own, without the debt ceiling provision. But with leaders urging their rank-and-file members to vote against the legislation as written, Democrats cannot afford to lose many votes.

That narrow margin in part led Democratic leaders to remove a provision that would provide $1 billion to the Israeli government for its Iron Dome air defense system against short-range rockets, according to a person briefed on the decision. A spokesperson for the House Appropriations Committee said that provision would likely be included in the annual bill that funds defense spending, which lawmakers are still haggling over.

Progressive Democrats, some of whom have accused Israel of human rights violations against Palestinians or called for suspending American military aid to Jerusalem, had balked at that funding on Tuesday.

Ransomware and cyberattacks are “a direct threat to our economy,” Treasury Secretary Janet L. Yellen said in a statement.Credit…Erin Scott for The New York Times

The Biden administration took action on Tuesday to crack down on the growing problem of ransomware attacks, expanding its use of sanctions to cut off digital payment systems that have allowed such criminal activity to flourish and threaten national security.

The Treasury Department said it was imposing sanctions on a virtual currency exchange called Suex, in the administration’s most pointed response to a scourge that has disrupted U.S. fuel and meat supplies this year, when foreign hackers locked down corporate computer systems and demanded large sums of money to free them.

The illicit financial transactions underpinning ransomware attacks have been taking place with digital money known as cryptocurrencies, which the U.S. government is still determining how to regulate.

The Treasury Department said Suex had facilitated transactions involving illegal proceeds from at least eight ransomware episodes. More than 40 percent of the exchange’s transactions had been linked to criminal actors, the department said.

“Ransomware and cyberattacks are victimizing businesses large and small across America and are a direct threat to our economy,” Treasury Secretary Janet L. Yellen said in a statement.

The department offered few details about Suex, declining to say where the company was based or what kinds of transactions it dealt with, though a Russian computer executive confirmed on Tuesday that he was the founder.

Treasury officials did say that while some virtual currency exchanges are exploited by criminals, Suex was facilitating illegal activities for its own gain.

Cybersecurity experts see exchanges as a weak point for ransomware gangs that otherwise operate wholly in the ether of the internet, all but untouchable by law enforcement. But the exchanges are an interface with the real world used to cash out cryptocurrency and public-facing companies that are vulnerable to financial sanctions.

Vasily Zhabykin, a graduate of a prestigious Russian university that trains diplomats, said by telephone on Tuesday that he had founded Suex to develop software for the financial industry. He denied any illegal activity and said it was possible that the Treasury Department had mistakenly targeted his company.

“I don’t understand how I got mixed up in this,” he said in a brief interview. Suex, which is registered in the Czech Republic, was mostly a failure and had conducted only a half dozen or so transactions since 2019, Mr. Zhabykin said, adding that he had three employees.

Russia is believed to be home to the most sophisticated ransomware groups, where they seem to operate with impunity. Other countries such as Iran and North Korea host the groups, cybersecurity experts say.

Over the past decade or so, key technologies came together in a tool kit for the ransomware industry: malware to scramble victims’ computers, routers that render communication anonymous and digital currencies for payments.

A weak point, according to a study of ransomware published in 2019 in The Journal of Cybersecurity, is exchanges: the businesses that convert digital currency into cash, where criminals lurking in the digital world eventually have to make an appearance to be paid.

Many exchanges have popped up in Russia in recent years, often leasing office space in Moscow’s financial district alongside banks. Russia pivoted from trying to ban digital currencies outright to enacting regulation this year allowing ownership.

The Treasury Department’s action came three months after President Biden, meeting in Geneva with President Vladimir V. Putin of Russia, demanded a crackdown on ransomware operators suspected of working from Russian territory. Mr. Putin made no promises. Before the meeting, one attack had taken out Colonial Pipeline, which provides much of the East Coast’s gasoline and jet fuel; another had penetrated JBS, a major U.S. meat supplier.

Attacks seemed to abate for a few months, and a major ransomware operator, DarkSide, appeared to have shut down.

But late this summer, attacks began to rise again. Paul M. Abbate, the F.B.I.’s deputy director, who specializes in cybercrimes, said at a conference last week that “there is no indication that the Russian government has taken action to crack down on ransomware actors that are operating in the permissive environment that they’ve created there.”

He added that few actions had taken against those in Russia facing indictments in the United States.

Intelligence officials report the same, and they say they believe that some Russian military and intelligence services make use of the ransomware operators to hide actions that may be conducted on behalf of the state, or at least with its acquiescence.

An attack against another food supplier was playing out on Monday, even as the Treasury Department was preparing its action. New Cooperative, a grain cooperative in Iowa, said it was part of “critical infrastructure” and noted that BlackMatter, a relatively new ransomware group, had promised not to attack such groups. But in responses that appeared in screenshots on Twitter, BlackMatter said it did not consider New Cooperative to be critical infrastructure. The two were in an open dispute over the definition of the category.

“We don’t see any critical areas of activity,” the ransomware group responded.

BlackMatter demanded just shy of $6 million to decrypt the company’s files. That figure declined drastically over time.

The Treasury Department said that in 2020, ransomware payments topped $400 million, four times as high as they were in the previous year. The economic damage, it said, was far greater.

CreditCredit…Sean Dong

Today in the On Tech newsletter, Shira Ovide asks: What would happen if Facebook retreated from many of the countries where its social network and its Instagram and WhatsApp apps have done profound harm, even as they’ve given a voice to the voiceless?

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