Australian watchdog files lawsuit against ASX over misrepresenting $165 million blockchain project

Australia’s Securities and Investments Commission (ASIC) has filed a suit against the Australia Securities Exchange (ASX) Ltd., accusing it of misleading statements astir its blockchain commercialized colony project, according to an Aug. 14 statement.

False statements

ASIC claims the ASX falsely stated successful February 2022 that its task was “on track” for an April 2023 motorboat and that it was “progressing” when, successful reality, it was not. The regulator argued that these statements were deceptive since the task was not gathering its milestones and was yet canceled.

The ASX’s blockchain initiative was intended to regenerate the Clearing House Electronic Subregister System (CHESS). However, ASIC noted that it was halted successful November 2022 owed to plan challenges, and ASX wrote down costs of AUD250 cardinal (over $165 million)

ASIC furthered that the task was already faltering arsenic of February 2022, contrary to ASX’s optimistic announcements. This hold and eventual cancellation resulted successful important losses for the ASX and its marketplace participants.

ASIC Chair Joe Longo stated that the project’s nonaccomplishment undermined marketplace integrity and reflected poorly connected the ASX committee and elder executives. He emphasized the value of close accusation for marketplace participants and the wide-reaching consequences of ASX’s missteps.

Longo added:

“Companies and marketplace participants trust connected what the ASX says astir its operations to marque their ain decisions and investments. We expect the ASX to beryllium a spot to database and put with confidence. When the ASX falls short, it has wide ranging consequences crossed the market.”

ASIC revealed that the latest issues followed ASX’s outgo of AUD1,050,000 (over $660 million) successful penalties successful March owed to lapses successful compliance with the marketplace integrity rules.

ASX responds

In an Aug. 14 statement, ASX CEO Helen Lofthouse said the institution was reviewing ASIC’s allegations and recognized “the value and superior quality of these proceedings.”

She added:

“We play a captious relation astatine the halfway of Australia’s fiscal markets and proceed to absorption connected supporting and delivering for customers. We are committed to taking ASX guardant and person made beardown advancement arsenic an enactment implicit the past 2 years.”

ASX stated that ASIC is seeking declarations, pecuniary penalties, an adverse publicity order, and costs against it arsenic portion of the lawsuit.

The station Australian watchdog files suit against ASX implicit misrepresenting $165 cardinal blockchain project appeared archetypal connected CryptoSlate.