ASIC Launches Expert Panel to Probe ASX Blockchain Failure Costing $164 Million

The Australian Securities and Investments Commission (ASIC) has escalated its investigation into the Australian Securities Exchange's (ASX) failed blockchain project, which incurred a cost of approximately $164 million. To aid in this investigation, ASIC has assembled a three-member expert panel. The panel comprises Guy Debelle, former deputy governor of the Reserve Bank, Rob Whitfield, non-executive director of the Commonwealth Bank, who will chair the panel, and Christine Holman, a non-executive director of Australian firms AGL and Collins Foods.

The panel's primary task is to identify any deficiencies or shortcomings within the ASX's management that may have contributed to the project's failure. This includes examining weaknesses in governance, capability, and risk management. The panel is expected to submit a comprehensive report to ASIC by March 31, 2026, detailing their findings and recommendations for further regulatory actions.

The ASX has expressed its willingness to cooperate with the panel, stating that it will engage "constructively" throughout the investigation. The failed blockchain project, initiated in 2015 under the leadership of then-CEO Elmer Funke Kupper, aimed to revamp the ASX's current trading platform, known as the Clearing House Electronic Subregister System (CHESS), by incorporating blockchain technology. The project involved New York-based startup Digital Asset Holdings.

However, the project faced numerous challenges, including concerns about the lack of market support for digital assets and the scalability of the product. These issues, along with dysfunctional management and the difficulty in finding experts to support the project, led to its abandonment in November 2024. The estimated cost of the project was around $245 million to $255 million AUD (approximately $164 million to $171 million).

The failure of the blockchain project has had a significant impact on public trust in the stock exchange, with more than a dozen brokers and market participants criticizing the initiative. The ASIC's deepened probe and the formation of the expert panel are crucial steps in understanding the root causes of the failure and ensuring that similar issues do not arise in the future.