Blame game rages over ASX’s failed CHESS system blockchain upgrade
Digital Asset — the New York firm responsible for Australian Securities Exchange’s now-abandoned blockchain-based clearing system — has blamed the securities exchange for dropping its blockchain plans.
Meanwhile, representatives of the ASX have clapped back in statements to Cointelegraph, calling the claims misleading.
For the last seven years, the ASX was poised to be the world’s first securities exchange to adopt blockchain technology, which would be in partnership with the New York-based firm. However, in a u-turn, ASX announced on May 17 that it would be abandoning the upgrade and likely look at more conventional tech.
According to a recent report from The Australian, Eric Saraniecki, the co-founder of Digital Asset told the attendees of a June 8 parliamentary joint committee on corporations and finance that there were two main reasons why the blockchain upgrade resulted in failure.
First, Saraniecki alleged that ASX was unwilling to hand over important test data that would’ve allowed Digital Asset to better test the functionality of the new system.
“It impacted our ability to design something that would meet their full requirements.”He said he was unsure why the ASX was so reluctant to hand over this key data, but it ultimately caused Digital Asset to have to make “assumptions in a vacuum.”
Second, Saraniecki said that despite the ASX talking publicly about a “big bang” method of replacing its nearly 30-year-old CHESS platform, it was simultaneously telling Digital Asset to preserve antiquated elements of the old system. This reportedly led to further discord between the two companies and the eventual failure of the upgrade’s implementation.
Concerns were not properly raised, defends ASX
However, in comments shared with Cointelegraph, ASX’s Non-Executive Director David Curran said the issue was a lack of communication from Digital Asset regarding their concerns.
Curran said had made it clear to “senior members of Digital Asset” and others that if there were concerns about the project, there were ways that they should have been raised and resolved.
“I did make it very clear to Digital Asset…I had little patience for software and hardware vendors, who said they weren't happy about doing something but did it anyway, because the client told them to.”“If they genuinely believed it was wrong, they had mechanisms to stop that and actually to raise [those concerns]. In those conversations I agreed that had not been done,” Curran added.
Curran clarified that he couldn’t speak “too much” to the specifics of this matter due to the nature of the ongoing review.
The ASX’s Managing Director and CEO Helen Lofthouse said that it wasn’t so much the “flexible requirements” causing challenges in the project, it was the pre-existing requirements of the system itself and the way that related to how settlements work in Australia.
Lofthouse explained that the Nov. 17, 2022 decision to announce a pause on the upgrade arose from the conclusion that the original solution design “was not going to be able to do what we needed it to do, which was both meet the current market requirements and give the flexibility.“
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While it has been widely-reported that the ASX had taken blockchain tech off the table completely, ASX CIO Tim Whiteley told Australian tech publication ITNews that “no firm decision” had been made.
“We remain on track to announce a solution design in the last quarter of this calendar year and we continue to explore all options for the solution design,” added Whiteley.
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