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U.S. Hits Chinese Cybersecurity Company With Sanctions After Breach

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U.S. Hits Chinese Cybersecurity Company With Sanctions After Breach

The Treasury Department imposed sanctions on a Beijing-based cybersecurity company on Friday, blaming it for helping Chinese hackers infiltrate U.S. communications systems and conduct surveillance across four continents.

In an announcement, the department said the company, Integrity Technology Group, had supported a Chinese state-sponsored hacking group known as Flax Typhoon in a campaign to break into foreign networks between the summer of 2022 and 2023, saying it found the group had “routinely sent and received information from Integrity Tech infrastructure.”

The action came after the Treasury Department revealed in a letter to lawmakers this week that a Chinese intelligence agency had breached its systems in what appeared to be an espionage operation, gaining access to the workstations of government employees and unclassified documents.

A spokesman for the department did not specify whether Flax Typhoon had been implicated in the attack on the Treasury Department’s systems, or whether the sanctions were merely part of a larger operation to disrupt China’s cybercapabilities.

The sanctions also follow the much more damaging revelation last year that a group linked to Chinese intelligence agencies and known as Salt Typhoon had hacked U.S. telecommunications networks, targeting the telephone conversations and text messages of an array of top political figures, including President-elect Donald J. Trump.

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Like Salt Typhoon, Flax Typhoon is among a handful of groups that Microsoft has publicly identified as being linked to Chinese intelligence and responsible for a range of state-sponsored cyberattacks. The group has been active since 2021 and appears focused on targets in Taiwan and the United States, according to the Congressional Research Service.

“The Treasury Department will not hesitate to hold malicious cyberactors and their enablers accountable for their actions,” Bradley T. Smith, an acting under secretary of the Treasury, said in a statement. “The United States will use all available tools to disrupt these threats as we continue working collaboratively to harden public and private sector cyberdefenses.”

In September, the F.B.I. said it had taken down a network of 200,000 consumer devices in the United States and abroad that had been compromised with malware and weaponized by Flax Typhoon.

The sanctions announced on Friday generally prohibit financial institutions and individuals from transacting with Integrity Technology Group, and freeze any of its assets in the United States.

It was not immediately clear what the breach of the Treasury Department may have achieved, but the agency represents an attractive target for state-sponsored hackers because of its Office of Foreign Assets Control, which is responsible for imposing sanctions and determining which individuals represent a threat to national security.

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Taiwan Suspects a Chinese-Linked Ship of Damaging an Internet Cable

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Taiwan Suspects a Chinese-Linked Ship of Damaging an Internet Cable

Taiwan is investigating whether a ship linked to China is responsible for damaging one of the undersea cables that connects Taiwan to the internet, the latest reminder of how vulnerable Taiwan’s critical infrastructure is to damage from China.

The incident comes as anxiety in Europe has risen over apparent acts of sabotage, including ones aimed at such undersea communication cables. Two fiber-optic cables under the Baltic Sea were severed in November, prompting officials from Sweden, Finland and Lithuania to halt a Chinese-flagged commercial ship in the area for weeks over its possible involvement.

In Taiwan, communications were quickly rerouted after the damage was detected, and there was no major outage. The island’s main telecommunications provider, Chunghwa Telecom, received a notification on Friday morning that the cable, known as the Trans-Pacific Express Cable, had been damaged. That cable also connects to South Korea, Japan, China and the United States.

That afternoon, Taiwan’s Coast Guard intercepted a cargo vessel off the northern city of Keelung, in an area near where half a dozen cables make landfall. The vessel was owned by a Hong Kong company and crewed by seven Chinese nationals, the Taiwan Coast Guard Administration said.

The damaged cable is one of more than a dozen that help keep Taiwan online. These fragile cables are susceptible to breakage by anchors dragged along the sea floor by the many ships in the busy waters around Taiwan.

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Analysts and officials say that while it is difficult to prove whether damage to these cables is intentional, such an act would fit a pattern of intimidation and psychological warfare by China directed at weakening Taiwan’s defenses.

Taiwan said the cargo vessel it intercepted had registered under the flags of both Cameroon and Tanzania. “The possibility of a Chinese flag-of-convenience ship engaging in gray zone harassment cannot be ruled out,” the Coast Guard Administration said on Monday in a statement.

Such harassment, which inconveniences Taiwanese forces but stops short of overt confrontation, has a desensitizing effect over time, according to Yisuo Tzeng, a researcher at the Institute for National Defense and Security Research, a think tank funded by Taiwan’s defense ministry. That puts Taiwan at risk of being caught off guard in the event of a real conflict, Mr. Tzeng said.

Taiwan experiences near-daily incursions into its waters and airspace by the People’s Liberation Army. Last month, China sent nearly 90 naval and coast guard vessels into waters in the area, its largest such operation in almost three decades.

China has also deployed militarized fishing boats and its coast guard fleet in disputes around the South China Sea region, and stepped up patrols just a few miles off the shore of Taiwan’s outer islands, increasing the risk of dangerous confrontations.

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Such harassment has been a “defining marker of Chinese coercion against Taiwan for decades, but over the last couple years has really stepped up,” said Gregory Poling, the director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies.

And in situations like this one and the recent damage to the cables under the Baltic Sea, it is difficult for the authorities to calibrate their response when a ship’s true identity is uncertain.

“Do you deploy a Coast Guard vessel every time there is an illegal sand dredger or, in this case, a ship that is registered to a flag of convenience and has Chinese ties damages a submarine cable?” Mr. Poling asked.

Ship tracking data and vessel records analyzed by The Times show that the ship may have been broadcasting its positions under a fake name.

Taiwan said the ship appeared to use two sets of Automatic Identification System equipment, which is used to broadcast a ship’s position. On Jan. 3, at the moment that Taiwan said the cable was damaged, a ship named Shun Xing 39 was reporting its AIS positions in the waters off Taiwan’s northeastern coast.

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About nine hours later, at around 4:51 p.m. local time, Shun Xing 39 stopped transmitting location data. That was shortly after the time that the Taiwan Coast Guard said it had located the ship and requested that it return to waters outside of Keelung port for an investigation.

One minute later, and 50 feet away, a ship called Xing Shun 39, which had not reported a position since late December, began broadcasting a signal, according to William Conroy, a maritime analyst in Wildwood, Mo., with Semaphore Maritime Solutions, who analyzed AIS data on the ship-tracking platform Starboard.

In the ship-tracking database, both Xing Shun 39 and Shun Xing 39 identify themselves as cargo ships with a class A AIS transponder. Typically, a cargo ship equipped with this class of transponder would be large enough to require registration with the International Maritime Organization and obtain a unique identification number known as an IMO number. Xing Shun 39 has an IMO number, but Shun Xing 39 does not appear in the IMO database. This suggests “Xing Shun 39” is the ship’s real identity and “Shun Xing 39” is fake, according to Mr. Conroy.

The Taiwan Coast Guard has publicly identified the vessel as Shun Xing 39, and said the ship used two AIS systems.

Vessel and corporate records show that Jie Yang Trading Ltd, a Hong Kong-based company, took over as the owner of Xing Shun 39 in April 2024.

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The waves were too large to board the cargo vessel to investigate further, the Taiwan Coast Guard Administration said. Taiwan is seeking help from South Korea because the crew of the cargo vessel said it was headed to that country, the administration said.

In 2023, the outlying Matsu Islands, within view of the Chinese coast, endured patchy internet for months after two undersea internet cables broke. These fiber optic cables that connect Taiwan to the internet suffered about 30 such breaks between 2017 and 2023.

The frequent breakages are a reminder that Taiwan’s communication infrastructure must be able to withstand a crisis.

To help ensure that Taiwan can stay online if cables fail, the government has been pursuing a backup, including building a network of low-Earth orbit satellites capable of beaming the internet to Earth from space. Crucially, officials in Taiwan are racing to build their system without the involvement of Elon Musk, whose rocket company, SpaceX, dominates the satellite internet industry, but whose deep business links in China have left them wary.

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United to add Elon Musk's Starlink Wi-Fi to flights this spring

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United to add Elon Musk's Starlink Wi-Fi to flights this spring

Is reliable Wi-Fi at 30,000 feet on the horizon?

United Airlines announced over the weekend that it will outfit much of its fleet with Wi-Fi provided by Elon Musk’s Starlink company and plans to fly its first commercial flight with the service this spring.

The service, which will be offered for free to members of the carrier’s loyalty program, United MileagePlus, underscores the increasing reach of Starlink, a SpaceX subsidiary that has launched and maintains a network of thousands of communication satellites.

The airline will begin testing Starlink’s Wi-Fi in February and expects to launch the service on an Embraer E-175 aircraft this spring, according to a news release. The first Starlink-enabled mainline United plane, which is operated directly by the airline instead of a regional subsidiary, will fly by the end of the year and will feature streaming services, shopping and games, the release said.

“Adding Starlink to as many planes as we can, as quickly as we can,” is at the center of the airline’s plans for its loyalty program this year, United MileagePlus Chief Executive Richard Nunn said in a statement. “It’s not only going to revolutionize the experience of flying United, but it’s also going to unlock tons of new partnerships and benefits for our members that otherwise wouldn’t be possible,” he said.

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Musk, who also owns electric vehicle maker Tesla, launched Starlink in 2019. The internet service relies on a network of satellites using a low Earth orbit to deliver broadband internet access, Starlink’s website says. United described the service as “the world’s fastest, most reliable connectivity in the sky.”

On-board Wi-Fi became available in 2003, when aircraft manufacturer Boeing announced its service Connexion, which has since been discontinued. Other providers have come online since, but service often is spotty or slow.

In-flight Wi-Fi through Starlink will eventually be available on all United flights on seat-back screens and personal devices, United said. The airline did not release pricing information for non-MileagePlus members who want to purchase the service. Wi-Fi currently costs $10 for nonmembers on domestic and short-haul international flights and $8 for members.

United isn’t Starlink’s first airline partner. Hawaiian Airlines announced in September that it would offer free Starlink connections to all travelers on Airbus-operated flights between the islands and the United States, Asia and Oceania. Semiprivate charter firm JSX also has free Starlink Wi-Fi on all of its 46 planes.

JetBlue has offered free in-flight Wi-Fi since 2017 powered by another provider. Delta gives free Wi-Fi to its SkyMiles members through T-Mobile, and American offers it to travelers for a fee.

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SpaceX launched its first Starlink satellites of 2025 from Florida on Monday, sending 24 new spacecraft into orbit. The Starlink network consists of more than 6,000 satellites, and Musk has ambitions to add as many as 30,000 more.

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Michael Barr to Leave His Role as Fed Vice Chair for Supervision

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Michael Barr to Leave His Role as Fed Vice Chair for Supervision

Michael Barr will step down from his role as the Federal Reserve’s vice chair for supervision by Feb. 28, or sooner if President-elect Donald J. Trump appoints a successor, the Fed said on Monday.

Mr. Barr will continue to serve on the central bank’s Board of Governors. But in an interview, Mr. Barr said the decision to leave his role as vice chair of supervision was intended to sidestep a protracted legal battle with Mr. Trump that he believed could damage the central bank.

Some individuals attached to the Trump administration wanted to fire Mr. Barr before his term as vice chair expired, according to people familiar with the matter who spoke on background because of the sensitivity of the issue.

That could have resulted in a lengthy — and costly — legal fight over whether an incoming president has the authority to remove someone from a Senate-confirmed position at an independent agency.

Some financial regulatory experts questioned why Mr. Barr — and the Fed itself — would allow a political change to influence who served in a powerful role. Jerome H. Powell, the Fed’s chair, has made a point of saying that the Fed is independent of the White House and that its decisions are not influenced by politics. Mr. Powell has also insisted that Mr. Trump lacks the legal authority to fire him from his role as Fed chair, which is also confirmed by the Senate.

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“I’m surprised by Barr’s announcement, because I expected him to resist Republican calls for his ouster and make a point of defending the Fed’s independence,” Ian Katz, managing director at Capital Alpha, said in an email.

Mr. Barr said he and his lawyers believed that he would prevail in court if Mr. Trump were to try and remove him. But he concluded that the fight wasn’t worth waging because of the harm it could inflict on the Fed.

“If it came to litigation on the merits, I would win,” Mr. Barr said. The bigger question, he said, was, “Do I want to spend the next couple of years fighting about that and is that good for the Fed? And what I decided was that no, it’s not good for the Fed, it would be a serious distraction from our ability to serve our mission.”

Mr. Barr said the decision was not easy. “The question I wrestled with is a tough question, and in many ways it was a painful decision.”

His departure will effectively freeze any bank regulatory actions until Mr. Trump names someone to the vice chairman role. In announcing his move, the central bank said: “The Board does not intend to take up any major rulemakings until a vice chair for supervision successor is confirmed.”

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The combination of Mr. Barr’s decision to step down, combined with the moratorium, struck some financial regulatory experts as especially problematic.

“The Fed historically, zealously guards its independence,” Aaron Klein, the Miriam K. Carliner chair and senior fellow in economic studies at the Brookings Institution. “I find it strange that the Fed would not only tacitly seem to support this decision by Barr, but go further and announce a moratorium on rule making.”

Mr. Klein noted that if Mr. Trump opted not to pick anyone for a year or more, it could effectively chill bank rule making indefinitely.

Dennis Kelleher, the president, chief executive and co-founder of Better Markets, a nonprofit that pushes for tougher financial regulation, called Mr. Barr’s decision “shocking” and said it would hinder the Fed’s role in overseeing the safety and soundness of the financial system.

“His baseless capitulation to deregulation zealots will, in fact, destroy that mission quicker and more thoroughly than any dispute over the position,” he said.

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Mr. Barr’s move comes after a tumultuous tenure overseeing regulation and supervision of the nation’s largest banks. Mr. Barr oversaw an attempt to rewrite financial rules that would have increased the amount of money that banks must have at the ready.

The overhaul would have required the largest banks to increase their cushion of capital — cash and other easily accessible assets that could be used to absorb losses — which Mr. Barr said would ensure banks could withstand periods of severe turmoil.

The proposal — and Mr. Barr — immediately came under attack from a wide variety of groups, including the banking industry, lawmakers and even some of his colleagues at the Fed. Two of the Fed’s seven governors, both Trump appointees, voted against the rules.

Mr. Barr ultimately watered down the proposal in September after acknowledging the blowback.

“Life gives you ample opportunity to learn and relearn the lesson of humility,” Mr. Barr said at an event that month.

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While Mr. Trump has not announced any plans to try to replace Mr. Barr, the president-elect has made clear he plans to take an industry-friendly stance toward banks, echoing his administration’s approach during his first term. Mr. Trump’s vice chair of supervision, Randal K. Quarles, worked to loosen bank supervision during his tenure.

Even before Mr. Barr announced his decision to leave, there was widespread speculation that the bank proposal, known as Basel III endgame, would not gain final approval in a Trump administration.

The changes must be jointly agreed upon by the Fed, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Mr. Trump has the opportunity to nominate the directors of the F.D.I.C. and O.C.C., though he has not yet said whom he plans to name.

Senator Tim Scott, the South Carolina Republican who will head the powerful Senate Banking Committee, welcomed Mr. Barr’s decision to step down, citing the blowup of Silicon Valley Bank and other regional firms in the spring of 2023 as well as the Basel III rules.

“From his supervisory failures during the spring 2023 bank failures to the disastrous Basel III endgame proposal — Michael Barr has failed to meet the responsibilities of his position,” Mr. Scott said in a statement. “I stand ready to work with President Trump to ensure we have responsible financial regulators at the helm.”

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