ASIC Launches Full-Scale Probe Into ASX After Blockchain Debacle—What Went Wrong?
Australia's financial watchdog isn't playing nice. The ASIC just greenlit a sweeping investigation into the ASX following its spectacular blockchain implosion—a A$250M faceplant that left traders scratching their heads.
Behind the scenes: The exchange's much-hyped distributed ledger upgrade crashed harder than a crypto noob's leveraged position. Now regulators want blood—or at least someone's head on a platter.
Why it matters: When a top-20 global exchange botches a core systems overhaul this badly, it shakes institutional confidence. Especially when they doubled down after three years of red flags.
The punchline? Another 'blockchain revolution' stalled by old-school bureaucracy. Maybe next time they'll just fork Ethereum like everyone else.
Failing off-chain
The inquiry follows ASX's failed blockchain-based CHESS replacement project, which began in 2016 as an ambitious attempt to modernize the exchange's 25-year-old clearing and settlement system using distributed ledger technology.
After seven years of development delays and cost overruns, ASX shelved the project in November 2022 following a damning independent audit by Accenture that identified "significant challenges with the solution designs." As a result, the exchange wrote off US$170 million in pre-tax losses.
By May 2023, ASX had officially abandoned blockchain technology entirely.
Project director Tim Whiteley confirmed at the time the exchange WOULD "need to use a more conventional technology than in the original solution in order to achieve the business outcomes."
The project's collapse has since triggered legal action, with ASIC suing the ASX last August for alleged misleading statements about the project's progress.
The ASX had already paid a $1,050,000 penalty (approximately US$684,000) last March for separate compliance issues related to market integrity rules.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, said that ASX's failures have "dented investor trust" and highlight the risks associated with over-promising on enterprise blockchain initiatives.
"The exchange has experienced several outages and failed to deliver on a promised blockchain project," Stadelmann told Decrypt. "Without competition, the ASX has become bloated and ineffective."
The panel has to deliver recommendations to address any identified shortcomings by March 31, 2026, with ASIC set to publish the report to guide potential regulatory action against the ASX.
The regulator and the exchange did not immediately respond to Decrypt’s request for comment.
Edited by Sebastian Sinclair
