Federal regulators have threatened a series of stiff sanctionsagainst Theranos, the embattled blood-testing company, includingclosing down its flagship laboratory and potentially barring itschief executive from owning or operating its labs for twoyears.

The sanctions, which have not been made final, were included ina strongly worded letter from officials from the Centers forMedicare and Medicaid Services. It is the latest blow to thecredibility of Theranos and Elizabeth Holmes, its chief executive,who seemingly became a self-made billionaire by promising to upendthe clinical testing industry.

The government officials proposed a series of sanctions againstthe company, including the revocation of the company’scertification for its California laboratory, its primary operation,and suspension of its eligibility to receive payments under theMedicare insurance program.

If the laboratory’s certification were to be revoked, Ms. Holmesand Theranos’s chief operating officer, Ramesh Balwani, would bebarred from owning or operating any laboratory for at least twoyears, the letter said.

In its response to the agency, dated April 1, Theranos said thatit had hired new leadership for the laboratory and “would be ableto ensure the deficient practices will not recur” through “robustnew quality systems” and “intense oversight.” It also said it hadstopped running a number of tests that inspectors had expressedconcerns about.

The company said it had not received notice of the regulators’final decision. A spokeswoman for Medicare declined to comment.

Regulators, including those from Medicare as well as the Foodand Drug Administration, have also raised repeated concerns aboutthe technology. While approving one of Theranos’s tests lastsummer, the F.D.A. made clear it needed more evidence that thetechnology was ready for prime time. The Medicare letter follows aninspection the agency performed last fall that found problems atthe lab.

She insisted Theranos had made changes aimed at addressingregulators’ concerns over the accuracy of its tests. “We’ve takencomprehensive corrective measures over the past several months,”she said. If Medicare chooses to impose sanctions on the company,she said, Theranos will continue to work with regulators to addressits concerns.

Theranos, the creation of Ms. Holmes, epitomized the promise ofSilicon Valley to transform — or disrupt, to use its own lingo —all of health care. Having dropped out of Stanford University tofound the company in 2003, Ms. Holmes claimed to have created awhole new way to perform multiple tests using a few drops of bloodfrom a finger prick, which would be less painful and less costlythan conventional blood tests.

Her vision of bringing laboratory testing to the masses,including allowing customers to order tests without a doctor’sorder, attracted some well-known venture capitalists. The companyearned a stunning $9 billion valuation and an abundance of newsmedia attention. Ms. Holmes graced the cover of numerous magazines,including T: The New York Times Style Magazine.

A scathing report in The Wall Street Journal last October put anend to the fairy tale and Theranos scrambled to respond to the newsmedia’s sudden turn. The company’s fall from grace came tosymbolize the overreach of Silicon Valley and the hype thatsurrounds unproven technology.

While Ms. Holmes has continued to defend the company in as manyforums as she can, the lack of hard information about whether thetechnology worked has only increased the skepticism surrounding hercompany.

Examiners from Medicare inspected Theranos’s laboratory inNewark, Calif., last fall and found numerous deficiencies, one ofwhich they said posed “immediate jeopardy to patient health andsafety.”

That particular deficiency related to Theranos’s test for theclotting ability of blood, a measurement used to help determine thecorrect dose of the blood-thinning drug warfarin. Too much warfarincan cause internal bleeding while too little can leave a patientvulnerable to a stroke. The inspection report, which was recentlymade public by Medicare, said that all 81 results provided topatients from that test from April to September of last year wereinaccurate.

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Theranos said in response to regulators that it had voided theresults of those tests. Ms. Buchanan said the company, aftertalking to the patients and doctors involved, did not believe anypatients had been harmed.

The regulators also said that the director of the laboratory wasnot qualified and some other personnel were inadequately trained.At the time of the inspection, the laboratory director was a localdermatologist who continued to run his medical practice while alsosupervising the lab.

After receiving the regulators’ findings in January, Theranossubmitted a plan to correct the problems in February. But inproposing the sanctions, the new letter from the regulators saysthat the company’s response “does not constitute a credibleallegation of compliance and acceptable evidence of correction forthe deficiencies cited.”

Among other things the letter said some documents referred to inTheranos’s submission were missing. It also said the company hadnot provided enough information to justify its conclusionsregarding whether patients were affected.

Philip D. Cotter, a consultant to laboratories, said the letterto Theranos was “definitely on the more serious end of thespectrum,’’ making it more likely that some sanctions would beimposed.

“It wouldn’t be impossible to turn this around but the responsethey would have had to turn in by March 28 would have had to bepretty convincing,’’ said Dr. Cotter, a principal at ResearchDx inIrvine, Calif.

Medicare suspended, revoked or limited the certifications ofabout 50 clinical laboratories in 2015, a small fraction of thelabs it oversees.

Theranos is now doing all of its tests in a separate laboratoryin Arizona, which is not being threatened with loss of itscertification. However, that laboratory uses standard equipmentpurchased from other vendors, not Theranos’s proprietary testingtechnology. Also, if Ms. Holmes were to be barred from owning anylaboratory, it would raise questions about whether Theranos couldcontinue to own and operate the Arizona lab.

Question: Provide a full detailed paragraph by building a casestudy that discusses the causes of Theranos' downfall. Focusspecifically on the secrecy and hubris surrounding the rise andfall of Theranos.