An Unholy Fiasco Of Fines

Patrick L Young
3 min readJul 12, 2022

I found a fascinating statistic the other day. According to Chainalysis, some $3.2 billion in cryptocurrency was stolen from exchanges and DeFi apps during 2021 which amounts to 100 times the total average of all US bank robberies according to the FBI.

…With the recent crypto bubble bursting — ceteris paribus — the good news is we’re on target to have only 40X as much crypto theft as US bank robbery proceeds this year.

The NSE, founded on presumptions of technocratic excellence and higher standards than prevailing markets, has finally descended into a bourse parody of a Brazilian telenovela. No sooner did Sebi announce “Peace in Our Time” and apparent resolution of the “Holy Hoax” co-location fiasco a few months than the whole affair promptly exploded in an even larger festering mess — with acute tabloid reporting bringing the situation to the Indian general public. Alongside the mainstream media, the short-term result has included yet more fines and indeed as I type, 2 leading NSE ‘formers’ (ex-CEO Chitra Ramkrishna and the shadowy C-figure of Anand Subramanian) remain incarcerated. Elsewhere reputations have been immolated and clearly, in retirement, another former NSE CEO Ravi Narain has seen any remaining vestige of his rumoured ambitions to chair Sebi, evaporate.

Suffice to say it’s a story where the rumours are lurid but even the stuff in the public domain is a little short of hilarious/weird. In the end, the previously holier than thou reputation of the NSE has been immolated in a tale where there was a mysterious guru apparently influencing if not running the exchange and the co-lo location ended up with a situation which didn’t infer a level playing field.

In the end, vast fines are upon us — In 2019 former NSE CEOs Ravi Narain and Chitra Ramkrishna had to pay back up to a quarter of their salaries over the co lo fiasco.

However in the end with this week’s fines, Chitra Ramkrishna has been fined over a million US dollars in 2022 alone! Ravin Narain’s formerly comfortable retirement must be a tad strained while former Group COO Subramanian and current Chief BDO Ravi Varanasi copped fines of over $630,000 each.

Some charts help illustrate the really big losers in the fines levied so far in the Holy Hoax Co Lo fiasco… However, the truly big loser is India where NSEL remains a festering carbuncle on the nation’s exchange reputation nearly a decade after that spot commodity exchange collapsed in a funding scandal while NSE was always deemed the most credible market of them all — and this has proven to be far from the case as hubris grew amongst management.

We estimate total fines in the NSE Co Lo Holy Hoax fiasco now exceed $8 million.

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You can also check out the “Magnificient 7” and “Oceans 11”, which illustrate the relative value of the CEO’s salary in exchanges.

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Patrick L Young

Entrepreneur, Investor, Author. #Exchanges #Fintech #Startups #Motorsport Emerging Markets. CoFounder @Exchange_Invest @HanzaTrade @MissionToRun @YMarkets