confidence evaporated in the early 2000s, many of the dot-coms went bust, leaving just the biggest — such as eBay, Amazon and Yahoo — standing.

This time, investors predict there will be more survivors. “You certainly have some overhyped companies that don’t have the fundamentals,” said Mike Jones, an investor at the venture firm Science Inc. “But you also have some really strong companies that are trading way below where they should.”

There have been warning signs that some crypto companies were not sustainable. Skeptics have pointed out that many of the most popular firms offered products underpinned by risky financial engineering.

Terraform Labs, for example, offered TerraUSD, a so-called stablecoin with a fixed value linked to the U.S. dollar. The coin was hyped by its founder, Do Kwon, who raised more than $200 million from major investment firms such as Lightspeed Venture Partners and Galaxy Digital, even as critics warned that the project was unstable.

The coin’s price was algorithmically linked to a sister cryptocurrency, Luna. When the price of Luna plummeted in May, TerraUSD fell in tandem — a “death spiral” that destabilized the broader market and plunged some investors into financial ruin.

drew scrutiny from several state regulators. In the end, a drop in crypto prices appeared to put the company under more pressure than it could withstand.

With the price of Bitcoin tumbling, Celsius announced on Sunday that it was freezing withdrawals “due to extreme market conditions.” The company did not respond to a request for comment.

The market instability has also triggered a crisis at Coinbase, the largest U.S. crypto exchange. Between the end of 2021 and late March, Coinbase lost 2.2 million active customers, or 19 percent of its total, as crypto prices dropped. The company’s net revenue in the first three months of the year shrank 27 percent from a year earlier, to $1.2 billion. Its stock price has plunged 84 percent since it went public last year.

This month, Coinbase said it would rescind job offers and extend a hiring freeze to battle the economic downturn. On Tuesday, it said it would cut about 1,100 workers.

Brian Armstrong, Coinbase’s chief executive, informed employees of the layoffs in a note on Tuesday morning, saying the company “grew too quickly” as crypto products became popular.

“It is now clear to me that we over-hired,” he wrote. A Coinbase spokesman declined to comment.

“It had been growth at all costs over the last several years,” said Ryan Coyne, who covers crypto companies and financial technology at the Mizuho Group. “It’s now turned to profitable growth.”

memo to staff, the Winklevoss twins said the industry had entered a “crypto winter.”

commercial starring the actor Matt Damon, who declared that “fortune favors the brave” as he encouraged investors to put their money in the crypto market. Last week, Crypto.com’s chief executive announced that he was laying off 5 percent of the staff, or 260 people. On Monday, BlockFi, a crypto lending operation, said it was reducing its staff by roughly 20 percent.

Gemini and BlockFi declined to comment. A Crypto.com spokesman said the company remains focused on “investing resources into product and engineering capabilities to develop world-class products.”

Cryptocurrencies have long been volatile and prone to boom-and-bust cycles. In 2013, a Chinese ban on Bitcoin sent its price tumbling. In 2017, a proliferation of companies creating and selling their own tokens led to a run-up in crypto prices, which crashed after regulators cracked down on so-called initial coin offerings.

These bubbles are built into the ecosystem, crypto enthusiasts said. They attract talented people to the industry, who go on to build valuable projects. Many of the most vocal cheerleaders encourage investors to “buy the dip,” or invest more when prices are low.

“We have been in these downward spirals before and recovered,” Mr. Jones, the Science Inc. investor, said. “We all believe in the fundamentals.”

Some of the companies have also remained defiant. During Game 5 of the N.B.A. finals on Monday night, Coinbase aired a commercial that alluded to past boom-and-bust cycles.

“Crypto is dead,” it declared. “Long live crypto.”

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What Happened on Day 105 of the War in Ukraine

Even as Russia hammers eastern Ukraine with heavy artillery, it is cementing its grip on the south, claiming to have restored roads, rails and a critical freshwater canal that could help it claim permanent dominion over the region.

The extension of Russian infrastructure into the occupied south could allow Moscow to fortify a “land bridge” between Russia and Crimea and build on efforts to claim control through the introduction of Russian currency and the appointment of proxy officials.

Russia’s defense minister, Sergei K. Shoigu, said on Tuesday that the military, working with Russian Railways, had repaired about 750 miles of track in southeastern Ukraine and set the conditions for traffic to flow from Russia through Ukraine’s eastern Donbas region to occupied territory in Kherson and Crimea.

Mr. Shoigu also said that water was once again flowing to Crimea through the North Crimean Canal — an important source of freshwater that Ukraine cut off in 2014 after the Kremlin annexed the peninsula. Mr. Shoigu claimed that car traffic was now open between “continental” Russia and Crimea.

Mr. Shoigu’s claims of restored roads and rails could not be immediately verified.

Satellite imagery reviewed by The New York Times showed that water was flowing through the parts of the canal in Crimea that were dry until March. Russian engineers blew open a blockage in the canal in late February, days after Russian forces invaded Ukraine. Ukrainian officials did not immediately comment on Wednesday.

The North Crimean Canal, a 250-mile-long engineering marvel built under the Soviet Union, had channeled water from Ukraine’s Dnipro River to the arid Crimean Peninsula until President Vladimir V. Putin seized it in 2014.

Credit…Brendan Hoffman for The New York Times

After Crimea’s annexation, Ukraine dropped bags of sand and clay into the canal to prevent the Russian occupiers from benefiting from the valuable freshwater.

Instead of flowing to Crimea, the canal was used to irrigate the melon fields and peach orchards in Ukraine’s Kherson region to the north.

Ukrainian officials said that cutting off the water was one of the few levers at their disposal to inflict pain on Russia without using military force.

For the Kremlin, the blockage represented a vexing and expensive infrastructure challenge, with Crimea’s residents suffering chronic water shortages and occasional shut-offs at the tap.

When Mr. Putin massed troops on Ukraine’s border last year, some analysts speculated that the canal was one of the prizes the Kremlin wanted.

Even as Russia sought to entrench its control in the south this week, a clandestine battle has emerged inside the occupied regions, involving Kremlin loyalists, occupying Russian forces, Ukrainian partisans and the Ukrainian military.

On Tuesday, Ukrainian media posted video of what they said was an explosion at a cafe in the occupied city of Kherson that had served as a gathering place for people collaborating with Russian forces. Russian state media described it as an act of “terror.”

It was the latest in a series of attacks targeting Russian supporters and proxies. It came amid reports — most impossible to independently verify — of Ukrainian guerrillas blowing up bridges, targeting rail lines used by Russian forces and killing Russian soldiers on patrol.

Credit…Tyler Hicks/The New York Times

Oleksiy Arestovych, an adviser to the Ukrainian president, said that there was a focused guerrilla movement operating in the south. “Partisans are fighting very actively,” he said on his YouTube channel.

In the east, where both armies are fighting for control, Ukrainian officials were weighing whether to withdraw their forces in the city of Sievierodonetsk, the last major pocket of Ukrainian resistance in the Luhansk region.

Sievierodonetsk has been blasted by weeks of Russian shelling, and President Volodymyr Zelensky of Ukraine referred to the city and its neighbor, Lysychansk, on Monday as “dead cities,” physically destroyed and nearly empty of civilians.

“Fighting is still raging and no one is going to give up the city, even if our military has to step back to stronger positions,” Serhiy Haidai, the Ukrainian military governor of the Luhansk region, said on Ukrainian television, according to Reuters.

Credit…Finbarr O’Reilly for The New York Times

Moscow’s announcement that it was extending its ties to the occupied south seemed certain to be greeted in Ukraine as further evidence of Russia’s determination to break Ukraine apart and pillage its natural resources.

“Russia is trying to build infrastructure for military supply,” said Mykhailo Samus, deputy director for international affairs at the Center for Army Studies, Conversion and Disarmament, a research group in Kyiv, the Ukrainian capital.

“Maybe they try to steal the agriculture, food products from occupied territories,” he added.

The Russian authorities said that the first train had traveled from the occupied city of Melitopol to Crimea carrying grain — freight that Ukrainian officials say was stolen from Ukrainian farmers forced to hand over their crops for a pittance or nothing at all.

Russia has blockaded Ukraine’s Black Sea ports since the start of the war, trapping more than 20 million tons of grain meant for export and deepening a global food crisis. Dimming the long-term outlook, grain silos in Ukraine are still about half full, the Ukraine Grain Association said on Wednesday, raising the possibility that much of this year’s crop could be left in the fields.

On Wednesday, the Russian and Turkish foreign ministers held talks focused on allowing Ukraine’s grain to reach global markets through the Black Sea.

Credit…Nicole Tung for The New York Times

But the Russian foreign minister, Sergey V. Lavrov, minimized the issue, suggesting that a global food catastrophe caused by a Russian blockade was a Western exaggeration.

“The current situation has nothing to do with the food crisis,” Mr. Lavrov said at a news conference in Ankara, the Turkish capital. “The Russian Federation is not creating any obstacles for the passage of ships and vessels.”

He blamed Ukraine, saying that its naval mines and refusal to use humanitarian corridors offered by Russia in Black Sea shipping lanes were stalling exports.

The Turkish foreign minister, Mevlut Cavusoglu, disagreed, saying that there was a global problem, but that it involved both Russian and Ukrainian products.

“The food crisis in the world is a real crisis,” Mr. Cavusoglu said, noting that Russia and Ukraine together supply about one-third of the world’s grain products.

Mr. Cavusoglu said that a mechanism was needed to get not just agricultural products from Ukraine out through the Black Sea, but also Russian fertilizer, which is vital for global agriculture.

He suggested that the answer lay in a United Nations proposal that the international community provide guarantees for the shipments that addressed security concerns on both sides.

Ukraine was not invited to the talks in Ankara, and its government and Russia’s each blame the other for the lack of exports.

The two countries normally supply about 40 percent of wheat needs in Africa, according to the United Nations.

Ukrainian officials are deeply skeptical of a promise by Mr. Putin, which Mr. Lavrov repeated, that if harbors were demined, Russia would not exploit them to dispatch an invasion fleet. Russian warships have also been patrolling Black Sea shipping lanes.

Oleksii Danilov, the secretary of Ukraine’s National Security and Defense Council, said on Twitter on Wednesday, “Our position on the supply of grain is clear: security first.” He accused Russia of “artificially creating obstacles to seize the market and blackmail Europe over food shortages.”

The United States has cited satellite imagery of cargo ships to accuse Russia of looting Ukrainian wheat stocks that it exported, mostly to Africa, echoing Ukrainian government allegations that Russia has stolen up to 500,000 tons of wheat, worth $100 million, since it invaded Ukraine in February.

Wheat is not the only Ukrainian resource prompting alarm. As Ukraine braces for what promises to be a difficult winter, Mr. Zelensky said that the country would not sell its gas or coal abroad. “All domestic production will be directed to the internal needs of our citizens,” he said.

Reporting was contributed by Valerie Hopkins, Ivan Nechepurenko, Malachy Browne, Neil MacFarquhar, Safak Timur and Anushka Patil.

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Rouble extends losses after rates slashed; Eurobonds in focus

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A picture illustration shows Russian rouble banknotes of various denominations on a table in Warsaw, Poland, January 22, 2016. REUTERS/Kacper Pempel/File Photo

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May 27 (Reuters) – The Russian rouble extended its losses on Friday after plunging in the previous session as the country’s central bank slashed interest rates, signalling more cuts, and the prospect of easing capital controls and a possible sovereign default hammered the currency.

The rouble slumped around 10% to the dollar and euro on Thursday after the central bank lowered its key rate to 11%, the third 300-basis-point cut in a row, as inflation slows from more than 20-year highs. read more

As the rouble continued swinging this way and that on Friday, Prime Minister Mikhail Mishustin said the government wanted to avoid currency volatility, a sign that Moscow is not entirely comfortable with the rouble’s seemingly uncontrollable moves.

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By 1316 GMT, the rouble was 1.3% weaker against the dollar at 66.09, swinging during the session from 64.89 to a more than two-week low of 67.4950. On Wednesday, the rouble had hit its strongest level since February 2018 of 55.80 against the greenback.

Versus the euro, the rouble lost 1.4% to trade at 68.93 , sliding further away from the seven-year high of 57.10 hit on Wednesday.

Propped up by capital controls, the rouble had artificially risen to become the world’s best-performing currency so far this year until this week’s slide. New gas payment terms requiring conversion of foreign currency into roubles and a fall in imports have also helped.

But it has now lost the support of the month-end tax period that usually sees export-focused companies convert foreign currency into roubles to pay local liabilities.

ROUBLE BALANCE

Economy Minister Maxim Reshetnikov said excessive rouble appreciation posed deflation risks, adding to his comments on Thursday that the currency’s strength, which has raised concerns about the negative impact on Russia’s budget revenue from exports, was making Russian goods uncompetitive abroad.

“The rouble has to be within some reasonable limits,” he said.

Reshetnikov, who also praised the central bank’s rate cut hoping it will spur lending activity, has said he expects the mandatory proportion of foreign currency revenue that exporters must convert into roubles to be cut further from 50%.

Market eyes are focused on Russia’s National Settlement Depository (NSD), which has promised to make interest payments on Friday worth $71.25 million and 26.5 million euros ($28.5 million) on two Eurobonds , . read more

That is in spite of Washington deciding against extending a key licence that had allowed Moscow to keep paying bondholders despite the sanctions imposed over its actions in Ukraine, putting Russia on the cusp of a unique kind of debt crisis. read more

Russian stock indexes were falling.

The dollar-denominated RTS index (.IRTS) was down 2.3% at 1,153.9 points. The rouble-based MOEX Russian index (.IMOEX) was 0.2% lower at 2,406.5 points.

($1 = 0.9305 euros)

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Reporting by Reuters; Editing by Nick Macfie and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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Analysis: Russia’s ‘political’ debt default sets emerging market precedent

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  • Russia says has paid $100 mln in interest due on May 27
  • The country was rated investment grade in early 2022
  • A defaults pushes up borrowing costs for issuers

NEW YORK/LONDON, May 27 (Reuters) – Russia is on the cusp of a unique kind of debt crisis which investors say would be a first time a major emerging market economy is pushed into a bond default by geopolitics, rather than empty coffers.

Until the Kremlin launched an attack on Ukraine on Feb. 24, few would have entertained the possibility of Russia defaulting on its hard currency bonds. Its strong solvency track record, bumper export revenues and an inflation-fighting central bank had made it a favourite of emerging market investors.

But the U.S. Treasury’s decision not to extend a licence allowing Russia to keep up debt payments despite wide-ranging sanctions, have set Moscow on the road to default.

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The Russian finance ministry has wired some $100 million in interest payments on two bonds due on Friday to its domestic settlement house. But unless money shows up in foreign bondholders’ accounts, it will constitute a default by some definitions.

And even if funds go through this time, payments of nearly $2 billion are due by the end of the year. One in late June is mandated to be settled outside Russia – a task experts predict will be impossible without the U.S. waiver. read more

Emerging market debt crises are nothing new — Russia itself reneged on its rouble bonds in 1998. Geopolitics too have spilled into the debt sphere before, forcing defaults in Venezuela and Iran for instance.

Yet in Iran’s case, small amounts of loan debt were hit by U.S. sanctions after its 1979 revolution, while Venezuela’s economy was already on its knees before U.S. curbs in 2019 pushed $60 billion in sovereign and sub-sovereign debt across the brink.

Russia meanwhile continues to rake in oil and metals earnings. Even with half its $640 billion reserves’ war chest frozen by sanctions, the central bank has enough cash to repay the $40 billion outstanding in sovereign hard currency debt.

“This is a completely different crisis from other emerging market crises, it’s not about ability or willingness to pay, they technically cannot pay,” said Flavio Carpenzano, investment director at Capital Group, an asset manager that – like many others – was exposed to Russia before war erupted. read more

The impact is amplified by the fact this would be Russia’s first major foreign bond default since just after its 1917 Bolshevik revolution. Sanctions on Russia and its own countermeasures have effectively severed it from global financial systems.

Comparisons with recent defaults such as Argentina in 2020 are inappropriate because most countries’ finances are strained when defaults happen, said Stephane Monier, chief investment officer at Lombard Odier.

“This would be the first externally and politically driven default in emerging markets’ history,” Monier said.

The Treasury license expiry means creditors may be unable to receive payments anyway, which Daniel Moreno, head of global emerging market debt at Mirabaud Asset Management, likened to “turning the world upside down.”

“Me, the creditor, is now not willing to accept the payment,” he added.

NO GOING BACK

Russia’s international bonds, most of which started the year trading above par, have dropped in value to between 13-26 cents on the dollar. They have also been ejected from indexes.

A key difference with past defaulters such as Argentina or Venezuela is that Russia’s attack on Ukraine — which it calls a special operation — has made it a pariah in many investors’ eyes, probably for years to come.

“There is a huge stigma in actually holding these bonds, with emerging markets asset managers under pressure from their clients asking them not to invest in Russia and to liquidate their positions,” said Gabriele Foa, portfolio manager for the Algebris Global Credit Opportunity Fund.

For now, a potential default is symbolic because Russia cannot borrow internationally anyway, nor does it need to. But what comes further down the line is crucial.

Regime change in Russia could at some point end Western sanctions and allow it back into the fold.

But first, creditors face a long and costly process to recover money, for instance by exchanging defaulted bonds with new ones. read more

A default stigma would also raise future borrowing costs.

By defaulting “you increase the cost of funding and it’s very likely this will happen to Russia too. They will need to pay a premium,” said Capital Group’s Carpenzano.

The White House expects a default to have minimal impact on the U.S. or global economy but Carpenzano reckons events around Russia are forcing a re-assessment of geopolitical risks in emerging markets. read more

“Geopolitical noise has increased and investors would like to be compensated for this higher risk,” he said, citing China’s hefty investment outflows in recent weeks.

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Reporting by Davide Barbuscia in New York and Sujata Rao, Karin Strohecker, Marc Jones and Jorgelina do Rosario in London
Editing by Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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How Influencers Hype Crypto, Without Disclosing Their Financial Ties

Some of the projects that Mr. Armstrong promoted were small-time, experimental crypto ventures that eventually encountered problems. In those cases, he said, he considered himself a victim, too.

“They’re preying on the novice crypto influencer who just got popular and is trying to figure out what they should and shouldn’t be doing,” he said. “It’s hard to go from 12,000 followers to a million in one year and make all the right decisions.”

Mr. Paul rose to fame as a video blogger and an occasional actor; YouTube once reprimanded him for publishing footage of a dead body he found in a Japanese forest. Over the years, he has parlayed his internet fame into an eclectic array of entrepreneurial pursuits, including a line of energy drinks.

Mr. Paul became interested in crypto last year as the market for NFTs started booming. In a recent interview, he acknowledged that he was still learning how to navigate the crypto market, even as he tried to profit from the technology. “I’m an extreme ideas person, not much of an executor,” he said.

Mr. Paul was involved in some of the initial brainstorming for the Dink Doink project. But the venture was ultimately spearheaded by one of his roommates, Jake Broido, who gave Mr. Paul 2.5 percent of the tokens that were initially issued.

In a tweet last June, Mr. Paul called it one of the “dumbest, most ridiculous” cryptocurrencies he had encountered, and circulated a video of a cartoon character singing sexually explicit lyrics. “That’s why I’m all in,” he added. He also appeared in a shaky-cam video on Telegram in which he hailed Dink Doink as possibly his favorite crypto investment.

The campaign was a flop, and Mr. Paul was pilloried by YouTube critics. The price of Dink Doink hovered well below a cent, before falling even further in value over the summer. Mr. Paul said he had never sold his tokens or profited from the project. But he said he regretted promoting the coin without disclosing his financial stake. “I definitely didn’t act as responsibly as I should have,” he said.

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Live Updates: Russia Moves to Annex Areas It Has Seized in Southeast Ukraine

KRAKOW, Poland — Fresh from its triumph over the last armed Ukrainian resistance in the devastated city of Mariupol, Russia appeared to be laying the groundwork Thursday for annexing swaths of southeast Ukraine, described by a high-ranking Kremlin official as having a “worthy place in our Russian family.’’

The official, Marat Khusnullin, Russia’s deputy prime minister for infrastructure, toured the region this week and outlined plans to take full control of vital infrastructure, including Europe’s largest nuclear power plant, as Russia fortified its defensive positions there and exerted its authority over the local population.

“I came here to provide maximum opportunities for integration,” Mr. Khusnullin was quoted by Russian news media as saying.

In a further sign that Moscow was preparing to push for the Russification of the region — the way it has in Crimea since seizing it from Ukraine in 2014 — Russian officials have already moved to introduce the ruble currency, install proxy politicians in local governments, impose new school curriculums, reroute internet servers through Russia and cut the population off from Ukrainian broadcasts.

Mr. Khusnullin said Russia even intended to charge Ukraine for electricity generated by the Ukrainian nuclear plant that Russian forces commandeered in the early weeks of the invasion — a plan that Ukraine described as extortion.

Russia’s moves came as the United States sought to further escalate pressure on the Kremlin. President Biden vowed to help gain speedy approval of applications to join NATO by formerly neutral Finland and Sweden, as he welcomed the leaders of those countries to the White House and as U.S. officials expressed confidence that they could satisfy Turkey’s objections to Finnish and Swedish membership. And the Senate overwhelmingly approved a $40 billion aid package for Ukraine that Mr. Biden was set to sign into law.

Even as the Russian authorities projected control over a Ukrainian region that is culturally close to Russia, President Vladimir V. Putin appeared to be punishing military subordinates for blunders in the three-month-old invasion.

A report by Britain’s defense intelligence agency suggested the Kremlin was conducting a purge of senior commanders deemed responsible for the failures of Russia’s initial strategy to seize much more Ukraine territory, including the capital, Kyiv, and second-largest city, Kharkiv. The report raised the question of whether Mr. Putin retained faith in his chief of the general staff, Valery Gerasimov.

The Russians have said nothing about any changes in the military leadership.

Credit…Olga Maltseva/Agence France-Presse — Getty Images

Russia’s new, narrower strategy of focusing on Ukraine’s east has proved more successful than its initially greater aims, even as its forces have retreated in the northeast and struggled to gain ground in the eastern Donbas region.

Following the longest battle of the war, Russian soldiers completed their capture of Mariupol on Tuesday after having seized control of the sprawling Azovstal steel plant, the last redoubt of Ukrainian defenders. More than 700 fighters from the Azov battalion, die-hards who had made a final stand against the Russians from the plant, surrendered between Wednesday and Thursday, according to the Russian Defense Ministry, bringing the total number of captives to 1,730.

The Kremlin has been using the mass surrender for propaganda purposes, describing its captives as terrorists and Nazi war criminals, and framing the conquest of Mariupol as a turning point in the conflict.

Although much of Mariupol is ruined, the capture of the port city is expected to bring Russia concrete benefits. It will complete a long-sought land bridge between the Russian-controlled Crimean peninsula to the south and the adjoining region known as Donbas, where pro-Russian separatists have battled Ukrainian forces since the Crimea annexation.

With Mariupol captured, Russian troops are now freed to help entrench Russia’s authority over the rest of the eastern region — well short of Moscow’s initial push to control all of Ukraine, but strong leverage in any future peace negotiations.

Credit…Andrey Borodulin/Agence France-Presse — Getty Images

The fighting has settled into a stalemate along most of the front.

Stiff Ukrainian resistance is forcing Russian troops to fight in smaller formations and seek more limited objectives elsewhere in the Donbas region, a senior Pentagon official said on Thursday.

“They’re going after smaller objectives,” the senior official said of the Russian goals, speaking on condition of anonymity to discuss operational details of American defense intelligence work. “And sometimes those objectives are only maintained for a short period of time before the Ukrainians take them back. They’re just being more modest in what they’re trying to go after.”

The shift in Russian tactics reflects not only the resilient Ukrainian defense, but also the nagging command, logistics and morale problems that continued to bedevil Russian commanders, especially in the hotly contested Donbas, the official said.

The southern region under Russian control covers a vast expanse that includes Ukraine’s agricultural heartland and several key ports. Along with Russia’s naval dominion in the Black Sea, annexation would tighten Moscow’s stranglehold on the Ukrainian economy and solidify its blockade of Ukraine’s southern coast.

In another possible sign of steps to entrench Russia’s control, its troops closed checkpoints on Thursday for civilians crossing between Russian-occupied zones and Ukrainian controlled areas in two regions, Kherson and Zaporizhzhia, according to the Ukrainian military and local authorities.

Credit…Olga Maltseva/Agence France-Presse — Getty Images

At one checkpoint, near the town of Vasilyevka, a line of cars transporting mostly women and children seeking to evacuate Russian-held areas stretched through farm fields. Ukrainian officials estimated more than 1,000 cars waited at the crossing, said Zlata Nekrasova, the deputy governor of the Ukrainian regional government in Zaporizhzhia.

The Ukrainians have accused Russia of forcibly deporting thousands to Russia and witnesses have described increasingly repressive efforts to enforce Russian rule.  

The Kremlin has sought to portray its actions as reflecting popular will. Dmitri S. Peskov, the Kremlin’s spokesman, appeared to play down the significance of Mr. Khusnullin’s statements signaling annexation, saying only locals could decide.

But in a move that some analysts regarded as reflecting confusion within the Russian leadership about how to secure Ukrainian areas seized by Russia, a group of lawmakers on Thursday submitted a bill to the State Duma that would allow Mr. Putin to establish “temporary administrations on territories where Russia’s army conducts military operations.”

Mr. Khusnullin said that Russia would soon begin charging Ukraine for electricity from the Zaporizhzhia Nuclear Power Plant, which Russia has controlled since early March. When fully operational, the plant can produce enough energy for four million homes.

Ukraine’s energy provider, NPC Ukrenergo, which called Mr. Khusnullin’s statement nuclear blackmail, said the real aim was to give Russia electricity leverage over Ukraine and the rest of Europe. It noted that the plant was part of the Ukrainian power grid and unequipped to deliver power to Russia.

Credit…Andrey Borodulin/Agence France-Presse — Getty Images

Moscow’s announcements were also part of a propaganda campaign aimed at conveying control over areas where its grip is less solid. Military analysts have said Russia’s forces could still face Ukrainian uprisings and counteroffensives.

Russia’s invasion in February, spearheaded by a rapid advance of tanks and helicopters, ultimately led to many Russian casualties, including some senior generals on the battlefield. The finger-pointing has started, Britain’s defense intelligence agency said in its Thursday report.

It said the commander of the elite 1st Guards Tank Army, Lt. Gen. Serhiy Kisel, had been suspended for failure to capture Kharkiv, where Ukrainian forces have not only counterattacked but driven the invaders back toward the Russian border 40 miles away.

The British agency also reported that the commander of Russia’s Black Sea fleet, Vice Adm. Igor Osipov, had likely been suspended following the April sinking of the fleet’s flagship, the cruiser Moskva. Asked about the report, a senior Pentagon went further, saying the commander had been dismissed.

General Gerasimov, Russia’s highest ranking uniformed officer, “likely remains in post but it is unclear whether he retains the confidence” of Mr. Putin, the British report said.

But in a signal that General Gerasimov remained in good standing, he spoke on Thursday by phone with Gen. Mark A. Milley, the chairman of the Joint Chiefs of Staff, the Pentagon said. It was their first call since the invasion.

Credit…Pool photo by Alexei Nikolsky

In the port city of Kherson, in the south near the border with Crimea, Mr. Khusnullin inspected infrastructure, including the port, a cargo railway station and a factory.

“We will live and work together,” he said, adding that Russia had already allocated funds to restore the city’s roads.

“We will now eat tomatoes and tomato paste more often in Russia thanks to the work of Kherson’s agricultural producers,” Mr. Khusnullin said, alluding to Kherson’s longtime role as a breadbasket and a global exporter.

But even as he spoke, Ukrainian officials said a convoy of civilian cars trying to flee the region came under fire from Russian soldiers. Roughly half of the million people who once lived in the region have fled, with witnesses who escaped offering harrowing stories of Russian repression.

In Kyiv, a committee in Ukraine’s Parliament accused Russia of having robbed Kherson of 400,000 tons of grain, sending it to Russia and creating conditions that “may lead to famine in the occupied territories.”

A Russian naval blockade of Ukraine’s ports is preventing Ukraine from exporting millions more tons, putting tens of millions of people worldwide at risk of hunger and famine, the U.N. secretary general, António Guterres, said Thursday at a U.N. conference on food security.

Credit…Finbarr O’Reilly for The New York Times

Marc Santora reported from Krakow, Poland, Ivan Nechepurenko from Tbilisi, Georgia, and Norimitsu Onishi from Paris. Reporting was contributed by Matthew Mpoke Bigg from Krakow, Eric Schmitt, Helene Cooper and David E. Sanger from Washington, Valerie Hopkins and Andrew E. Kramer from Kyiv, Shashank Bengali from London, Anton Troianovski from Brussels and Rick Gladstone from New York.

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