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Australian Regulator Sues Country’s Largest Crypto Exchange

Australian Regulator Sues Country’s Largest Crypto Exchange

99bitcoins99bitcoins2024/08/14 15:49
By:AlexAkriti Seth

Australian Regulator Sues Country’s Largest Crypto Exchange image 0

In its continued crackdown on crypto, Australia’s Securities and Investment Commission (ASIC) has sued the country’s largest digital asset exchange, ASX Limited, on 13 August 2024.

The regulator is suing the exchange due to its misleading statement about its now-cancelled blockchain project.

ASX Under Scrutiny For Mishandling Now-Cancelled Blockchain Project

ASIC has commenced proceedings in the Federal Court against Australia’s largest market operator, ASX Limited, for allegedly making misleading statements related to its Clearing House Electronic Subregister System (CHESS) replacement project https://t.co/yyruQ5PpFB pic.twitter.com/d3ZLUGMKSF

— ASIC Media (@asicmedia) August 13, 2024

ASX is being sued by ASIC for allegedly making misleading statements regarding the progress of its blockchain project. The project aimed to replace its Clearing House Electronic Subregister System (CHESS). ASX since announced that it had cancelled the project.

In November 2022, ASX halted its planned blockchain system for settling trade after IT Service Management Company, Accenture, identified “significant challenges” with its design following a review of the project. The project cost up to the point of it being cancelled, and decision totalled around $250 million AUD ($168 million), after several costly delays.

ASIC alleges statements made in ASX announcements on 10 February 2022 –  that the project remained “on-track for go-live” in April 2023 and was “progressing well” – were misleading.

The regulator said, “those representations were misleading and deceptive because, at the time of the announcements, the project was not tracking to plan and ASX did not have any reasonable basis to imply the project was on track to meet future milestones.”

EXPLORE: 12 Popular Ways to Buy Bitcoin with a Credit Card Instantly in 2024

The Exchange May Face Over $330 million In Penalty

ASIC Chair Joe Longo spoke on the case against the exchange. He said, “ASX’s statements go to the heart of trust in the integrity of our markets. We believe this was a collective failure by the ASX Board and senior executives at the time.”

Longo went on to say “Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments. We expect the ASX to be a place to list and invest with confidence. When the ASX falls short, it has wide ranging consequences across the market.”

Though ASIC has the crypto exchange, it is not yet known what penalty it will seek. However, the Australian Financial Review (AFR) reported that ASX faces a staggering penalty of over $500 million AUD ($330 million).

The exchange has commented on the allegations. In its own statement, ASX CEO Helen Lofthouse said “We recognise the significance and serious nature of these proceedings. We cooperated fully with ASIC’s investigation and are now carefully reviewing and considering the allegations”.

This isn’t the Australian regulators first run-in with the crypto platform.

On 7 March 2024, ASIC announced ASX had paid a penalty of $1,050,000 AUD ($695,000). This came after an ASIC investigation into its compliance with the market integrity rules.

EXPLORE: Cardano Users Loyal: On-Chain Data Shows ADA Is Surprisingly Undervalued

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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