ASX Gets A$20.5M Fine for Lying About Its Blockchain Disaster
Australia's stock exchange has been handed a A$20.5 million fine (about £10.6 million) after admitting it misled investors over a blockchain project that, in hindsight, had absolutely no business being started in the first place.
The ASX runs a system called CHESS, which handles trade clearing and settlement. It was built in COBOL, ran on OpenVMS on Itanium hardware, and by 2017 the exchange had decided it was time to modernise. Rather than do something sensible, they opted for blockchain. The 2019 annual report talked up the usual benefits: efficiency, standardisation, reduced operational risk, new growth opportunities. The whole bingo card.
It did not go well.
By February 2022, with the project already running late, the ASX told the market that things were "progressing well" and that its integrated test environment was "open and operating successfully." This turned out to be, at best, a creative interpretation of events. Within months, the exchange was issuing a string of statements about delays and complications. Not long after, they scrapped the whole thing.
Financial regulator ASIC sued in 2024, arguing that the February 2022 statement was misleading. The regulator's position was that the ASX's dual role, both as a market operator and a listed company whose own shares trade on CHESS, meant that any false reassurances had the potential to corrode confidence in Australian markets more broadly. The ASX settled, admitted it had misled investors, and Australia's Federal Court this week formalised the penalty. On top of the fine, the ASX must also cover ASIC's A$3 million in legal costs.
A parliamentary inquiry into the project identified three causes of failure. The ASX never properly defined what it was actually trying to build. Requirements kept expanding while construction was already underway, so planning and building were happening simultaneously, which is exactly as chaotic as it sounds. And critically, nobody ever properly established whether blockchain could handle the load. The scalability question was apparently left open while the project rolled forward regardless.
The broader irony here is that the ASX's decision was widely cited in blockchain circles as proof that distributed ledger technology was mature enough for serious financial infrastructure. A former AWS executive, writing about his time investigating whether AWS should move into blockchain, recalled hearing repeatedly on Wall Street that the ASX project validated the technology. AWS never became a major player in the space. The ASX clearly wishes it hadn't either.
The project is a near-perfect case study in how to burn money and credibility simultaneously: pick a fashionable technology, skip the hard questions about whether it fits the problem, keep adding scope, and then tell the market everything is fine when it isn't.