Failed Aussie Blockchain Project Ends With Big Fine for Fibs About It Being on Track
Arthur T Knackerbracket writes:
The attempt by Australia's Securities Exchange (ASX) to replace its core trading platform with a blockchain-based system has ended with an A$20.5 million fine ($14.2 million/10.6 million), further humiliation after the project flopped.
The ASX runs a platform called the Clearing House Electronic Subregister System (CHESS) to process and track trades on its exchange. In 2017, the ASX decided to replace CHESS, citing difficulties maintaining the application, which the bourse coded in COBOL and ran in OpenVMS on Itanium processors.
The ASX is a listed company so its own shares trade on CHESS.
The organization decided to replace CHESS with blockchain-based architecture. As explained in its 2019 annual report [PDF], the ASX believed its decision would help it "develop new services that improve the efficiency and standardisation of processes, reduce operational risk, and create new opportunities for growth and innovation."
That optimism was utterly misplaced because the project foundered and missed deadline after deadline.
But in February 2022, the ASX issued a statement [PDF] in which it described the project as "progressing well, with the fully integrated industry test environment open and operating successfully."
In the months that followed, the organization issued a string of statements about difficulties with the project and expected deployment delays. The ASX ended up abandoning the project.
In 2024, financial regulator the Australian Securities and Investments Commission (ASIC) sued, alleging that claim all was well with the CHESS replacement was a misleading statement. The regulator argued that as both the market operator, and a listed company itself, any misleading statements from ASX had the potential to undermine confidence in the entire Australian securities market.
ASX and ASIC settled the matter in June, and the bourse admitted [PDF] to having misled investors.
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