INVADES BANKING OFFICIALS WORRY

Nxxx,2021-09-05,A,001,Bs-4C,E2

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VOL. CLXX . . . No. 59,172

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NEW YORK, SUNDAY, SEPTEMBER 5, 2021

? 2021 The New York Times Company

OFFICIALS WORRY

AS CRYPTO BOOM

INVADES BANKING

SCRAMBLE TO REGULATE

Start-Ups Promise Huge

Returns as Customers

Shoulder the Risk

By ERIC LIPTON

and EPHRAT LIVNI

PHOTOGRAPHS BY JOHNNY MILANO FOR THE NEW YORK TIMES

A floodgate in Terrebonne Parish, La., where officials have been trying for years to secure federal funding for a levee system similar to the one in New Orleans.

Where Towers

Lesson of the Levees: Protecting Everyone May Be Out of Reach

Parishes were left to wonder

Stood, Rebirth This article is by Richard Fausset,

about its fate at a time when bigger and better-known places are

Sophie Kasakove and Christopher

Grinds to Halt Flavelle.

ever-more-likely to be competing

By MATTHEW HAAG

and PATRICK McGEEHAN

The Amish Market opened in

1999 in the shadow of the World

Trade Center, one of the few grocery stores and delis for residents

and workers in the southernmost

tip of Manhattan. Two years later,

the 110-story twin towers at the

complex collapsed in the Sept. 11

attacks, showering the store in

fiery debris and ash.

Shuttered after the attacks, the

market reopened roughly five

years later in a new location a few

blocks away. It joined a triumphant comeback as Lower

Manhattan was reborn into one of

the country¡¯s largest business districts, a vibrant residential neighborhood and, with the addition of

the National September 11 Memorial and Museum, a tourist destination.

The Amish Market boomed, too,

its staff doubling to 200 employees

and weekly sales surging to more

than $160,000.

But all that growth evaporated

in a matter of days in a far different crisis that has wiped out many

of Lower Manhattan¡¯s gains since

2001.

When the coronavirus swept

into New York in March 2020, the

neighborhood abruptly emptied

out, and revenue at the Amish

Market plummeted in just one

week, to $24,000 ¡ª not enough to

pay rent, payroll and overhead.

The store limped along until it permanently closed last September.

More than 350 retailers in

Lower Manhattan have shut down

over the past 18 months. New

malls built after the terror attacks

have had few shoppers, and landlords have sued retailers for not

paying rent. Seven hotels have

closed permanently, and others

have yet to reopen.

Private-sector

jobs

have

shrunk to 221,000, a smaller work

force than in the months before

2001. Through the first seven

months of 2021, daily ridership in

the busiest subway stations in

downtown reached just 6.3 million

passengers, an 82 percent decrease from the same period in

2019, according to an analysis by

The New York Times of subway

ridership data.

More than 21 percent of Lower

Manhattan¡¯s office space is available for rent, a record high that is

more than double the vacancy

rate before the pandemic, according to Newmark, a real estate

services company.

Continued on Page 16

LAROSE, La. ¡ª After Hurricane Katrina, an ambitious and

expensive system of levees, walls,

storm gates and pumps was installed around New Orleans to

protect against the kind of flooding and horror that so deeply

scarred the city, and the nation, in

2005. And when Hurricane Ida hit

in the past week, exactly 16 years

later, those hopes were largely fulfilled. The flooding was minimal.

But 60 miles away, in the small

community of Larose, the situation was different. In William

Lowe¡¯s neighborhood, storm

surge from Ida overtopped a modest levee maintained by the

Lafourche Parish government

near his elevated house, sending

water from a nearby canal up over

his floorboards. Days later, his

neighborhood was still waterlogged, and he and his family were

getting to and from the house by

boat.

William Lowe and his family have been getting to his home in

Larose, La., by boat since Hurricane Ida struck last weekend.

¡°You¡¯ve got lives destroyed

down here,¡± said Mr. Lowe, 49,

choking back tears. ¡°You go to the

Dollar General, you¡¯ve got people

standing outside bawling, because they¡¯ve got nothing.¡±

In the working-class bayou

country south and west of New

Orleans, local government offi-

cials have been trying for decades

to secure federal funding for a system similar to the one in New Orleans, to little avail.

And as Ida moved north, bringing more death and destruction to

places like New York City, advocates for the project in coastal

Lafourche

and

Terrebonne

for storm protection funding.

As sea levels rise and a warming ocean brings more fearsome

storms, the fight over hurricane

protection in Southern Louisiana

is only the latest example of a

growing dilemma for the United

States: which places to try to

save, and how to decide.

Until recently, that question

may have seemed like the plot of a

dystopian movie, or at least a

problem to leave for future generations. But as disasters become

more severe, the cost of rebuilding

has

skyrocketed.

Extreme

weather has caused more than

$450 billion in damage nationwide

since 2005; the number of disasters causing more than $1 billion

in damage reached 22 last year, a

record.

The Government Accountability Office has warned those costs

may be unsustainable. Yet the deContinued on Page 14

BlockFi, a fast-growing financial start-up whose headquarters

in Jersey City are across the Hudson River from Wall Street, aspires to be the JPMorgan Chase of

cryptocurrency.

It offers credit cards, loans and

interest-generating accounts. But

rather than dealing primarily in

dollars, BlockFi operates in the

rapidly expanding world of digital

currencies, one of a new generation of institutions effectively creating an alternative banking system on the frontiers of technology.

¡°We are just at the beginning of

this story,¡± said Flori Marquez, 30,

a founder of BlockFi, which was

created in 2017 and claims to have

more than $10 billion in assets, 850

employees and more than 450,000

retail clients who can obtain loans

in minutes, without credit checks.

But to state and federal regulators and some members of Congress, the entry of crypto into

banking is cause for alarm. The

technology is disrupting the world

of financial services so quickly

and unpredictably that regulators

are far behind, potentially leaving

consumers and financial markets

vulnerable.

In recent months, top officials

from the Federal Reserve and

other banking regulators have urgently begun what they are calling a ¡°crypto sprint¡± to try to catch

up with the rapid changes and figure out how to curb the potential

dangers from an emerging industry whose short history has been

marked as much by high-stakes

speculation as by technological

advances.

In interviews and public statements, federal officials and state

authorities are warning that the

crypto financial services industry

is in some cases vulnerable to

hackers and fraud and reliant on

risky innovations. Last month, the

Continued on Page 15

Biden Is Still Mourning a Son,

But Some Can¡¯t Bear His Grief

By KATIE ROGERS

JO?O SILVA/THE NEW YORK TIMES

Looting has led residents of Phoenix, a mostly Indian suburb, to create checkpoints and barricades.

In South Africa, Fatal Mix of Race and Vigilantes

By JOHN ELIGON

and ZANELE MJI

PHOENIX, South Africa ¡ª The

blows thundered down ¡ª bats, a

hammer, a field hockey stick ¡ª as

Njabulo Dlamini lay curled on the

pavement, trying to summon the

strength to move.

He and five friends, all of them

Black, had been driving in a

INTERNATIONAL 4-11

Farmers Call Them Vermin

Beavers were extinct in Scotland for

400 years. Now, they¡¯re back, causing

mayhem and controversy.

PAGE 11

Parched in Argentina

Drought is drying up the Paran¨¢ River,

upending ecosystems, trade and livelihoods in a three-nation region. PAGE 4

minibus taxi through the streets of

Phoenix, a predominantly Indian

suburb created from the forced racial segregation of apartheid

South Africa.

A mob surrounded them,

dragged them from the taxi, made

them lie on the pavement and beat

them furiously, according to witnesses and video footage obtained

by The New York Times. Some of

Mr. Dlamini¡¯s friends managed to

escape. Others were chased and

beaten again by the crowd, which

had been whipped up in recent

days by WhatsApp warnings and

reports of violence by Black people streaming into their community to loot shopping centers. Mr.

Dlamini barely made it across the

street. He later died of his injuries

Continued on Page 10

WASHINGTON ¡ª In the hours

before Lance Cpl. Jared Schmitz,

20, was killed by a terrorist¡¯s

bomb in Afghanistan, he posed for

a photograph taken by a bunkmate. In the image, the Marine¡¯s

brow was furrowed. He flashed a

peace sign.

¡°This is Jared Schmitz,¡± his father, Mark Schmitz, said he told

President Biden days later at Dover Air Force Base, where the two

men had traveled to observe the

dignified transfer of the remains

of 13 U.S. Marines killed last

month in the attack in Kabul.

¡°Don¡¯t forget his name.¡±

But Mr. Schmitz was confused

by what happened next: The president turned the conversation to

his oldest son, Beau, who died of

brain cancer in 2015. Referring to

him has become a reliable constant of Mr. Biden¡¯s presidency. In

speeches, Oval Office discussions

and personal asides, Mr. Biden

tends to find a common thread

back to his son, no matter the

topic. But for Mr. Schmitz, another

father consumed by his grief, it

was ¡°too much¡± to bear.

¡°I respect anybody that lost

somebody,¡± Mr. Schmitz added in

an interview, ¡°but it wasn¡¯t an appropriate time.¡±

KHALID MOHAMMED/AFP ¡ª GETTY IMAGES

Joseph R. Biden Jr. with his

son Beau Biden in 2009. He

died of brain cancer in 2015.

The Biden administration,

seeking to avoid a public rift with

Gold Star families, has not pushed

back on criticism from Mr.

Schmitz and other families who

have said the president brought

up his own son too often and acted

distant during the ceremony at

Dover. But the moment crystallized just how much Mr. Biden is

still haunted by the memory of a

son he had always described to

confidants as ¡°me, but without all

the downsides,¡± and how his anguish over that loss can clash with

the political realities of being president.

Mr. Biden¡¯s reputation is staked,

in part, around his ability to withContinued on Page 17

SUNDAY BUSINESS

SUNDAY STYLES

SPORTS 23-25

Choreographing the Hits

An American Stuns Barty

Coping With Harsh Conditions

Sean Bankhead, the choreographer

behind many of the most explosive

music videos of the year, is a pop star¡¯s

secret weapon. Among his clients:

Cardi B and Lil Nas X.

PAGE 10

The 45th-ranked Shelby Rogers beat

Ashleigh Barty, the No. 1 seed in the

women¡¯s draw, in three sets to reach the

fourth round at the U.S. Open. PAGE 25

As extreme weather wreaks havoc in

the Pacific Northwest, farmers, fieldworkers and lawmakers have begun

improvising ways to deal with a terrible

new reality.

PAGE 6

¡®The Just Enough Family¡¯

The designer Liz Lange, a scion of the

storied corporate-raider Steinberg

family who was once known for maternity wear, has a podcast about a life

of money and privilege.

PAGE 1

SUNDAY REVIEW

Ross Douthat

PAGE 9

NATIONAL 12-18

OBITUARIES 20-22

Democrats Sell Spending Plans

A Ray of Sunshine

Lawmakers hit the road to win backing

for a $3.5 trillion budget blueprint and

$1 trillion infrastructure bill.

PAGE 12

Willard Scott, a longtime forecaster on

NBC¡¯s ¡°Today¡± show, was 87.

PAGE 20

A Lifeline in Oklahoma

Medicaid expansion aids access to care

for low-income tribal members and

buoys the Indian Health Service. PAGE 13

Water Cooler Conversations

Research on workplaces has delivered

some surprising information on the

value of working together, and of collaborating remotely.

PAGE 1

BOOK REVIEW

Words After a Tragedy

The Times¡¯s book critics reflect on how

9/11 has influenced writers.

PAGE 14

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