Australia’s securities regulator sues ASX for making false claims about the blockchain project

ASIC filed a lawsuit on Tuesday and has not yet specified the penalty it intends to pursue. However, the Australian Financial Review (AFR) has reported that ASX is subject to a maximum penalty of over A$500 million.

The securities regulator of Australia has filed a lawsuit against the nation’s largest exchange, ASX, for making a false statement regarding its since-cancelled blockchain project.

ASIC stated that the ASX Board and senior executives collectively failed, and that ASX’s statements were “deceptive.”

The Securities and Investment Commission (ASIC) of Australia has filed a lawsuit against ASX Limited, the country’s largest market operator, for allegedly making false statements regarding the progress of its blockchain project to replace the outdated Clearing House Electronic Subregister System (CHESS). The regulator disclosed that the project had been cancelled on Wednesday.

After Accenture identified “significant challenges” with its design, ASX canceled its intended blockchain system for concluding trade in November 2022. After numerous delays, the decision resulted in a write-down of approximately A$250 million ($168 million). In 2017, ASX declared that it would transition one of its primary services to a blockchain-based system by Q1 2020, following years of testing.

ASIC filed a lawsuit on Tuesday and has not yet specified the penalty it intends to pursue. However, the Australian Financial Review (AFR) has reported that ASX is subject to a maximum penalty of over $500 million in Australian dollars.

“We acknowledge the gravity and importance of these proceedings.” In a statement, ASX chief executive Helen Lofthouse stated, “We have completely cooperated with ASIC’s investigation and are currently conducting a thorough review and consideration of the allegations.”

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