ASX Limited has admitted misleading investors about its failed blockchain project to replace its CHESS clearing system, agreeing to pay a penalty of A$20.5 million plus A$3 million in legal costs pending Federal Court approval. The admission centers on a February 2022 statement claiming work was “progressing well” when internal documents showed the project was classified “red” indicating serious problems. By December 2021, the system was already off track to meet its April 2023 launch target, with test environments running at reduced scope and slipping deadlines.
Six weeks after the misleading statement, ASX flagged likely delays before eventually pausing the project in November 2022 and writing off up to A$255 million in costs. The regulator ASIC dropped two of three original claims as part of the settlement, which ends a dispute dating back to 2024 and closes one of Australia’s most prominent exchange technology failures.
FXnCO Insight
Market participants should demand more frequent and granular project status disclosures from exchanges undertaking critical infrastructure upgrades to avoid similar operational and financial exposure.
Source: Finance Magnates