⛽ Why are gas prices so high?

NSE sues SEBI, Binance faces US probe, and Gas prices hit a 6-year high

May 14, 2021

Hey 👋

Welcome to In The Loop➰

A newsletter that brings you the latest news from finance, business, and tech straight to your inbox every morning. Sign up below 👇

There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

Sensex: 48,732.55 (+0.086%) ↑

Nifty 50: 14,677.80 (-0.13%) ↓

Dow Jones: 34,021.45 (+1.29%) ↑

Nasdaq 100: 13,109.15 (+0.83%) ↑

Bitcoin: $50,612.36

Top Stories 📰

1. NSE v. SEBI battle continues.... ⚔️

The National Stock Exchange of India (NSE) is suing the Securities and Exchange Board of India (SEBI) to get unrestricted access to $816.77 million of its revenue deposited into a separate account for more than four years.

According to the report, India's market regulator had asked NSE in 2016 to deposit all the revenue earned from offering co-location services into a different account and had barred it from using those funds.

NSE's co-location framework allows brokerages to rent data racks inside its data centre, providing faster access to the price feed and facilitating swift execution of trades. It also lets trading members place their servers inside the facility.

In April 2019, SEBI said that it lacked evidence to accuse NSE of committing fraudulent and unfair trade practice. But, it did find that the exchange did not conduct due diligence while installing the co-location servers.

Why it matters? NSE has now moved to the Securities Appellate Tribunal to get hold of its money and wants the statutory body to pass a decree ending the need for the bourse to put the revenues earned from co-location services into a separate account. While the hearing is set for May 17, SEBI has raised an objection saying the tribunal can't pass any orders without its technical member, C K G Nair, being present.

2. World's largest crypto exchange under investigation 🕵️

Binance is facing a probe by Internal Revenue Services and the Justice Department as officials handling money laundering and tax offenses sought information into Binance's business.

As per blockchain forensics firm Chainalysis, the number of transactions tied to criminal activity flowing through Binance was more than any other cryptocurrency exchange. The firm, which tracked $2.8 billion worth of Bitcoin that it assumed to be illegal in 2019, found that transactions worth nearly $756 million (27.5%) wound up on Binance. In response, the company said that it adheres to all anti-money laundering regulations in operating jurisdictions.

The US Commodity Futures Trading Commission, an independent agency that regulates the derivatives markets, has been investigating Binance on whether it allowed Americans to make illegal trades by letting them buy derivatives linked to digital tokens. The agency, along with the Justice Department, will also examine whether Binance has taken necessary measures to keep Americans off its exchange.

Why it matters? Despite Wall Street's approval, the cryptocurrency industry has been facing some obstacles going mainstream as officials have raised concerns that Americans are using cryptocurrencies to hide illegal transactions, adding that those who've made massive profits betting on the market's rise are evading taxes.

3. Colonial Pipeline hack: US Gas prices hits 6-year high at $3 🚀

Nearly half of the US is experiencing a significant fuel shortage after a cyberattack crippled a major pipeline, resulting in the gasoline prices reaching a six-year high of $3 per gallon. Nearly 12,000 gas stations have reported being empty, prompting panic buying in Southeast US, including Florida, Virginia, North Carolina, and Georgia.

A quick overview — On May 7, Colonial Pipeline said that it was the victim of a ransomware cyberattack that had halted its pipeline operations. The 5,500-mile pipeline system runs from Texas to New Jersey and provides 45% of the East Coast's fuel, including gasoline, diesel, jet fuel, home heating oil, and military supplies. The FBI has linked the hackers to a group called DarkSide that specialize in digital extortion and are believed to be somewhere around Eastern Europe or Russia.

While Colonial Pipeline initially said that they had no intention of paying any ransom, the company paid nearly $5 million to help restore its pipeline. After receiving the payment hackers, provided the decrypting tool to stabilize their computer network, and voila! Colonial Pipeline restarted their operations — although they said that it'll take some days for the supply chain to achieve normalcy.

Why it matters? Ransomware attacks are pretty common. According to a ransomware task force report, the total amount paid by ransomware victims increased by 311% in 2020, reaching nearly $350 million worth of cryptocurrency. What's more, the average ransom paid by firms for the same year was $312,493.