ASIC Targets ASX: $164M Blockchain Disaster Sparks Expert Panel Probe

ASIC has launched a formal inquiry into the Australian Securities Exchange (ASX) following the $164 million collapse of its blockchain-based CHESS replacement project.

The probe will examine the ASX group’s governance, risk management, and operational capability. A panel of independent experts has been appointed to lead the investigation, with findings expected in early 2026.

The Australian Securities and Investments Commission (ASIC) announced in a press release the formation of a panel to investigate internal frameworks at the ASX.

This comes after the collapse of ASX’s years-long effort to modernize its CHESS platform with blockchain technology, a move that ultimately resulted in a $250 million loss.

According to the announcement, the inquiry will focus on evaluating how the ASX governs its strategic initiatives, manages operational risks, and ensures adequate capabilities across its leadership and technology teams.

Notably, ASIC has appointed Rob Whitfield as chair of the three-member panel, along with Christine Holman and Guy Debelle..

Whitfield is a former Westpac executive and currently serves as a non-executive director at the Commonwealth Bank and Transurban. He also held senior roles in the New South Wales Treasury.

Holman brings 35 years of experience from the media, infrastructure, and investment sectors and holds board roles at AGL and Collins Foods.

Meanwhile, Debelle is the former deputy governor of the RBA and currently chairs FundsSA, among other roles.

Furthermore, the panel is expected to submit its findings to ASIC by March 31, 2026. The final report will be made public and will guide ASIC’s next steps in addressing any issues identified within the ASX group.

The ASX’s blockchain failure has raised broader questions about the governance of major financial infrastructure providers. Once seen as a potential global model for blockchain integration in stock exchanges, ASX’s collapsed CHESS project has become a cautionary tale.

This probe isn’t isolated in ASIC putting eyes on ASX’s operations. In August 2024, ASIC sued the ASX for allegedly misleading the market over its failed blockchain-based CHESS replacement project.

Australia’s ASIC sued market operator ASX for allegedly mishandling the blockchain-based clearing house replacement project.https://t.co/3jGCegY5dL

The CHESS replacement program was intended to modernize Australia’s market infrastructure, but technical flaws, project mismanagement, and regulatory concerns led to its cancellation.

The failure triggered scrutiny from both ASIC and the Reserve Bank of Australia (RBA), leading to concerns about the ASX’s ability to manage critical infrastructure.

ASIC claimed the ASX falsely stated the system was on track in early 2022, despite knowing of delays. After seven years of delay and cost overruns, in November 2022, the company admitted setbacks.

An independent review by Accenture later uncovered significant scalability challenges, leading to the project’s cancellation and a $250 million financial loss.

By May 2023, ASX announced to have officially abandoned the project entirely.

ASIC Chair Joe Longo said ASX’s actions undermined trust and caused widespread market consequences. “We believe this was a collective failure of the ASX board and senior executives,” he stated, highlighting the damage to investors who relied on the company’s public claims.

Notably, the ASX also paid a $1,050,000 penalty last March for separate compliance issues about market integrity rules.

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