Digital Asset, the New York firm responsible for the Australian Securities Exchange's now-abandoned blockchain-based clearing system, has blamed the stock exchange for abandoning its blockchain plans.
Meanwhile, ASX representatives have responded in statements to Cointelegraph, calling the claims misleading.
For the past seven years, the ASX was destined to be the first stock exchange in the world to adopt blockchain technology, which would be in partnership with the New York-based firm. However, in a U-turn, the ASX announced on May 17 that it would be abandon update and probably look for more conventional technology.
According to a recent report The Australian's Eric Saraniecki, co-founder of Digital Asset, told attendees of a joint parliamentary committee on corporations and finance on June 8 that there were two main reasons why the blockchain upgrade resulted in failure.
First, Saraniecki claimed that ASX was unwilling to provide important test data that would have allowed Digital Asset to better test the functionality of the new system.
“It affected our ability to design something that would meet all of their requirements.”
He said he wasn't sure 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 even though ASX spoke 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 update rollout.
Concerns were not raised correctly, defends ASX
However, in comments shared with Cointelegraph, ASX non-executive director David Curran said the problem was Digital Asset's lack of communication regarding its concerns.
Curran said he had made it clear to "core members of Digital Asset" and others that if there were concerns about the project, there were ways they should have been raised and resolved.
"I made that very clear to Digital Asset...I had little patience with software and hardware vendors, who said they weren't happy to do something, but did it anyway, because the customer told them to do it."
“If they really believed it was wrong, they had mechanisms to stop that and actually raise [those concerns]. In those conversations I agreed that it had not been done," Curran added.
Curran clarified that he could not speak "too much" about the details of this matter due to the nature of the ongoing review.
ASX CEO and CEO Helen Lofthouse said it wasn't so much the "flexible requirements" that were causing challenges in the project, but the pre-existing requirements of the system itself and how they related to how the systems work. settlements in Australia.
Lofthouse explained that the November 17, 2022 decision of announce a break on the upgrade came from the conclusion that the original solution design "was not going to be able to do what we needed it to do, which was to meet current market requirements and provide flexibility."
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Although it has been widely-reported that the ASX had completely phased out blockchain technology, ASX CIO Tim Whiteley said Australian tech publication ITNews that "no firm decision was made."
“We remain on track to announce a solution design in the last quarter of this calendar year and continue to explore all options for solution design,” Whiteley added.
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