Australia’s ASIC Sues Stock Market Operator Over Misleading Blockchain Upgrade Claims
Australia’s corporate regulator ASIC sued market operator ASX for allegedly mishandling the blockchain-based Clearing House Electronic Subregister System (CHESS) replacement project, it said Wednesday.
ASX misled the market by stating the project was on track in early 2022, the lawsuit alleges. However, just six weeks later, ASX revealed that the project was likely to be delayed.
The ASX commissioned an independent review via Accenture later that year, uncovering significant issues with the scalability of the blockchain technology underpinning the new system. These problems led to the project being halted — and a $250m write-off.
CHESS, the system used to record share ownership and process share trades on the ASX, was introduced in 1994. The ASX started developing a replacement system in 2015, adopting blockchain tech in 2017. Despite facing multiple setbacks, the ASX claimed in Feb. 2022 that the new system would be operational in 2023.
The regulator alleges that ASX knew the project was behind schedule. Still, it publicly declared otherwise, creating a false impression of the project’s progress.
ASX’s Misleading Claims Undermined Market Trust: ASIC Chair Joe Longo
“ASX’s statements go to the heart of trust in the integrity of our markets,” ASIC Chair Joe Longo said. “We believe this was a collective failure by the ASX Board and senior executives at the time.”
“Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments. We expect the ASX to be a place to list and invest with confidence. When the ASX falls short, it has wide ranging consequences across the market.”
Longo stated that the project’s delay and eventual halt in Nov. 2022 resulted in substantial financial losses for both the ASX and investors who had relied on the company’s claims about the project’s progress and launch timeline.
ASX Responds to ASIC Lawsuit
ASX CEO Helen Lofthouse acknowledged the seriousness of the lawsuit filed by ASIC. She said the bourse operator is cooperating with the regulator’s investigation and that they are reviewing the allegations.
While ASIC has not yet specified the penalty it seeks, it’s worth noting that ASX earlier paid an A$1.05 million fine ($695,415) in March 2024 for separate market integrity rule breaches.
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Australia’s ASIC Sues Stock Market Operator Over Misleading Blockchain Upgrade Claims
Australia’s corporate regulator ASIC sued market operator ASX for allegedly mishandling the blockchain-based Clearing House Electronic Subregister System (CHESS) replacement project, it said Wednesday.
ASX misled the market by stating the project was on track in early 2022, the lawsuit alleges. However, just six weeks later, ASX revealed that the project was likely to be delayed.
The ASX commissioned an independent review via Accenture later that year, uncovering significant issues with the scalability of the blockchain technology underpinning the new system. These problems led to the project being halted — and a $250m write-off.
CHESS, the system used to record share ownership and process share trades on the ASX, was introduced in 1994. The ASX started developing a replacement system in 2015, adopting blockchain tech in 2017. Despite facing multiple setbacks, the ASX claimed in Feb. 2022 that the new system would be operational in 2023.
The regulator alleges that ASX knew the project was behind schedule. Still, it publicly declared otherwise, creating a false impression of the project’s progress.
ASX’s Misleading Claims Undermined Market Trust: ASIC Chair Joe Longo
“ASX’s statements go to the heart of trust in the integrity of our markets,” ASIC Chair Joe Longo said. “We believe this was a collective failure by the ASX Board and senior executives at the time.”
“Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments. We expect the ASX to be a place to list and invest with confidence. When the ASX falls short, it has wide ranging consequences across the market.”
Longo stated that the project’s delay and eventual halt in Nov. 2022 resulted in substantial financial losses for both the ASX and investors who had relied on the company’s claims about the project’s progress and launch timeline.
ASX Responds to ASIC Lawsuit
ASX CEO Helen Lofthouse acknowledged the seriousness of the lawsuit filed by ASIC. She said the bourse operator is cooperating with the regulator’s investigation and that they are reviewing the allegations.
While ASIC has not yet specified the penalty it seeks, it’s worth noting that ASX earlier paid an A$1.05 million fine ($695,415) in March 2024 for separate market integrity rule breaches.
The post Australia’s ASIC Sues Stock Market Operator Over Misleading Blockchain Upgrade Claims appeared first on Cryptonews.
Read More
Sam Bankman-Fried Moved to Notorious LA Prison That Housed Al Capone, Charles Manson