The blame game continues between Digital Asset and the Australian Securities Exchange (ASX) over the failed blockchain upgrade of ASX’s CHESS system.
Digital Asset, the New York-based firm responsible for the abandoned blockchain clearing system, has pointed fingers at ASX for dropping the plans. ASX representatives, however, have dismissed these claims as misleading.
ASX had been poised to become the world’s first securities exchange to adopt blockchain technology in partnership with Digital Asset over the past seven years.
However, in a surprising turn of events, ASX announced on May 17 its decision to abandon the upgrade and explore more conventional technology options.
Digital Asset’s co-founder, Eric Saraniecki, addressed the issue during a parliamentary joint committee meeting on June 8. He stated two main reasons for the failure of the blockchain upgrade.
First, he alleged that ASX was reluctant to provide crucial test data that would have allowed Digital Asset to better test the functionality of the new system.
This lack of information forced Digital Asset to make assumptions in the absence of necessary data.
Second, Saraniecki claimed that ASX had publicly discussed replacing its old CHESS platform with a “big bang” approach while simultaneously asking Digital Asset to preserve outdated elements of the system.
This conflicting approach reportedly created further discord between the two companies, ultimately leading to the failure of the upgrade.
On the other side, ASX non-executive director David Curran responded to these allegations by stating that the issue arose from a lack of communication from Digital Asset.
Curran emphasized that if Digital Asset had concerns about the project, they should have been raised and resolved through appropriate channels.
ASX managing director and CEO Helen Lofthouse explained that the challenges did not stem from the “flexible requirements” but rather from the preexisting requirements of the system itself and how they related to settlements in Australia.
She revealed that the decision to pause the upgrade in November 2022 was based on the realization that the original solution design could not meet the current market requirements and provide the necessary flexibility.
Contrary to reports stating that ASX has completely abandoned blockchain technology, ASX’s chief information officer, Tim Whiteley, clarified that no firm decision had been made.
He mentioned that ASX is on track to announce a solution design later in the year and is exploring all options for the upgrade.
The ongoing blame game and differing accounts reflect the complex nature of the failed blockchain upgrade between Digital Asset and ASX.
The exact details and outcome of the situation remain uncertain as an ongoing review prevents the release of further information.
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