ASX Faces Court Action Over Failed Blockchain CHESS Project
Synopsis
A shareholder plans to seek court approval to sue former ASX directors and officers over alleged breaches of duty linked to the abandoned CHESS blockchain project, which was scrapped after years of delays and delivery problems.
An ASX shareholder is set to pursue legal action against the exchange’s former officers and directors for the failed CHESS project, representing a possible new chapter in the troubled history of the market operator’s technology.
Rosherville is set to file a statutory derivative lawsuit, alleging that some of its former directors and officers violated their fiduciary duties in relation to the abandoned crypto-based replacement for CHESS.
The suit, which would be brought in the name of ASX, would not allege any wrongdoing by the exchange itself.
Project Costs and Regulatory Action
The ASX CHESS project was set to replace the Clearing House Electronic Subregister System for the settlement of Australian shares trades. The original program was due to begin in April 2023, but it was postponed by a year to 2016-17.
In November 2022, ASX terminated the program after years of delays and design flaws and wrote off costs of about A$250 million, and later the estimate of ASIC was around A$245 million against profits, leaving a charge of A$255 million.
In a statement in the Federal Court on 3 July 2026, ASX was ordered to pay a A$20.5 million penalty after it admitted that its assertion that the project was progressing well in February 2022 was misleading. The market’s regulator, ASIC, brought the action, seeking penalties.
Replacement Program Moves Ahead
The redesigned ASX CHESS project is being delivered separately from the original blockchain-based program. The first phase (clearing services) went live on 20 April 2026.
Operating revenue was up 11.2 per cent year-on-year to A$602.8 million for the exchange, according to figures released by ASX. Underlying net profit after tax grew by 3.9 per cent, while statutory net profit increased by 8.3 per cent.
The new lawsuit comes as ASX deals with the fallout from the project and the transition to the new system.
Source: Reuters
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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