The Australian Securities and Investments Commission (ASIC) has sued ASX Ltd, the operator of Australia's stock market. The regulator alleges that ASX misled the public about the progress of a blockchain-based settlement system upgrade, which was later shelved.
ASIC's lawsuit claims that ASX violated the law by stating in a February 2022 update that the project was on track, despite knowing it was undergoing significant delays. The lawsuit, which seeks unspecified penalties, accuses ASX of undermining the integrity of Australia's financial markets and investor confidence. By engaging in misleading conduct, "ASX risked damaging perceptions of the integrity of the Australian financial markets and the confidence of investors," the filing reads.
The lawsuit alleges that ASX had been aware of delays as of July 2021 but continued to present the project as progressing as planned. The project, originally touted as a pioneering use of blockchain technology, has now been delayed until 2029.
ASX's current CEO, Helen Lofthouse, acknowledged the seriousness of the allegations and said the company is reviewing them. The legal action represents a significant strain in relations and trust between ASX and its regulator. Perhaps notably, ASIC has itself faced criticism for not anticipating the full extent of the issues with the upgrade.
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