Australia’s financial watchdog is taking aim at the nation’s biggest stock exchange.
In cryptocurrency trending news, Australia’s Securities and Investment Commission (ASIC) has taken legal action against ASX Limited, the country’s largest market operator, accusing it of misleading the public regarding the progress of its blockchain project intended to replace the outdated Clearing House Electronic Subregister System (CHESS).
As per the blockchain technology news, the controversy came to light when, after years of anticipation, ASX abruptly announced in November 2022 that it was scrapping the project following Accenture’s identification of “significant challenges” with its design. This decision resulted in a staggering write-down of approximately A$250 million ($168 million.)
Originally, ASX had pledged in 2017 that it would transition one of its core services to a blockchain-based system by Q1 2020.
However, despite repeated delays, the company continued to assure the public that the project was on track. ASIC’s lawsuit, filed on Tuesday, highlights ASX’s February 2022 announcements, which falsely claimed the project was “progressing well” and on schedule for an April 2023 launch. According to ASIC, these statements were deceptive, undermining trust in the market’s integrity.
As the legal battle unfolds, the potential repercussions for ASX are severe, with reports indicating that the company could face a maximum penalty exceeding A$500 million ($330 million).
ASX’s leadership, including CEO Helen Lofthouse, has acknowledged the seriousness of the situation, expressing full cooperation with ASIC’s investigation. Meanwhile, the scandal has intensified calls for the resignation of ASX Chairman Damian Roche.
ASIC Chair Joe Longo emphasized the critical importance of the project, arguing that the ASX Board and senior executives failed to uphold their responsibility to provide accurate and transparent updates to the Australian public.
