Federal regulators have barred Theranos CEO Elizabeth Holmes from owning and operating a medical laboratory for a period of two years.

Regulators also revoked the certification of the embattled blood-testing start-up's flagship laboratory in Newark, California, as well as its approval to receive Medicare and Medicaid payments.

The revocation will be effective on Sept. 5. The company, however, said that it would no longer conduct any patient testing effective immediately.

The sanctions, which Theranos announced in a statement released on July 7, followed months of investigations by the Centers for Medicare & Medicaid Services (CMS).

During the course of investigations, government inspectors found that the Silicon Valley firm violated a number of federal testing standards.

Among the numerous deficiencies that the CMS has found is one described to pose immediate jeopardy to the health and safety of the patient, which appears to refer to the erroneous results in a blood clotting test among patients who use the blood thinner warfarin.

The biotech firm, which was once valued at more than $9 billion, positioned itself as a provider of a cheaper but more efficient alternative to traditional medical tests. It claimed to be capable of processing up to 70 lab test using only a few drops of blood.

Revelations, however, emerged that the signature laboratory technology was being used only on a handful of tests. These were exacerbated by reports of former employees who claimed the company's tests were not reliable.

The Wall Street Journal was the first to question the company's technology and testing methods and the announcement in essence vindicated its reports that stirred a controversy that Holmes once compared to a witch hunt.

In its statement, Theranos said that it is taking full responsibility for the issues at its Newark laboratory and has already undertaken remedial actions, which include shutting down and rebuilding the lab from the ground up, as well as working on its personnel and training. It also said that it would continue to work with the CMS to resolve issues.

"The company will continue to work with CMS to resolve and remediate outstanding issues in the Newark lab, and will continue to provide services to its customers through its Arizona lab," Theranos said.

"While we are disappointed by CMS' decision, we take these matters very seriously and are committed to fully resolving all outstanding issues with CMS and to demonstrating our dedication to the highest standards of quality and compliance."

Health regulators proposed banning Holmes from holding diagnostic business as early as March, citing a series of controversies over her company's erratic and faulty blood test results.

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