ASIC Taps Financial Heavyweights to Probe ASX After $250M Blockchain Fiasco

ASIC has launched a formal inquiry into ASX’s internal operations following the AU$254M collapse of its blockchain-based CHESS replacement project, abandoned in 2023.
A three-member expert panel will review ASX’s governance, risk management, and institutional capability, led by Rob Whitfield, alongside Christine Holman and Guy Debelle.
The investigation will try to uncover structural and cultural failures behind years of mismanagement and assess whether ASX can meet its regulatory and financial responsibilities.

Australia’s financial regulator has launched a formal inquiry into the ASX Group’s internal operations after years of botched upgrades and governance failures, culminating in the collapse of a multi-year blockchain overhaul that burned through more than AU$250M in investors’ money.

The Australian Securities and Investments Commission (ASIC) announced the formation of a three-member panel tasked with reviewing the exchange’s governance, risk controls, and institutional capability.

Former Westpac executive and current Commonwealth Bank board member Rob Whitfield will lead the review. Whitfield, who’s a decorated figure in Australian finance, will be joined by AGL and Collins Foods director Christine Holman and former RBA deputy governor Guy Debelle, who now chairs South Australia’s sovereign wealth fund, FundsSA.

Related: Bank for International Settlements Warns Stablecoins Fail Key Test

The ASX Fallout

All of this comes after ASX’s failed attempt to replace its 1990s-era CHESS clearing system with a distributed ledger solution. The project, launched in 2016 with high hopes, ran aground in 2022 after an independent audit by Accenture flagged design flaws and scalability issues, then it pulled the plug later that year, taking a pre-tax write-down of AU$254M.

By mid-2023, it simply had abandoned the blockchain. Just like that. Project director Tim Whiteley stated back then that the project’s intention was to revert to a “more conventional technology” in future infrastructure plans, whatever that means.

It’s been two years now.

Anyway, the ASIC panel will go beyond those technical audits and will try to identify the cultural and structural weaknesses that led to recent compliance incidents (the company barely finished 60% of the software) and evaluate whether ASX is meeting its financial and regulatory mandates.

That panel is expected to deliver a full account of what went wrong and propose reforms to prevent a repeat.

Related: Grayscale Launches “Space and Time Trust” to Power Next-Gen Web3 and AI

Credit: Source link