Rosherville Pty Ltd is preparing to bring former ASX officers and directors before the Federal Court of Australia. The shareholder plans to seek permission to file a lawsuit over alleged breaches of duty that led to the failure of the blockchain project meant to replace the CHESS system.
This legal action takes the form of a statutory derivative lawsuit under sections 236 and 237 of the Australian Corporations Act. Under this process, if the court grants permission, Rosherville will obtain the right to act directly on behalf of ASX in suing its former leaders. The notice of intent to sue comes just weeks after the Australian stock exchange settled its legal dispute with the regulator.
A Technology Promise That Ended in an Audit
The root of the issue dates back to 2016 when ASX began the project to replace the Clearing House Electronic Subregister System (CHESS). ASX partnered with Digital Asset, a New York-based company, to build a new system based on distributed ledger technology. A year later, in December 2017, they announced plans to become the first securities exchange in the world to use blockchain for its core services.
However, the project’s implementation repeatedly missed its deadlines. A series of delays culminated in the project being frozen in November 2022, immediately after an independent audit report by Accenture identified significant issues with the system’s design and technical capabilities. ASX finally officially scrapped the blockchain project entirely in May 2023 and decided to switch back to conventional technology.
Who is the Next Target
The trail of failure also triggered legal action by the state. In August 2024, the Australian Securities and Investments Commission (ASIC) took ASX to court. The regulator highlighted the exchange’s February 2022 announcement claiming the project was progressing well and on track for an April 2023 launch - a claim ASIC deemed to lack a reasonable basis.
Following a lengthy process, ASX admitted to misleading conduct regarding its blockchain project in June 2026. Consequently, the Federal Court handed down a ruling on July 3, 2026, ordering the exchange to pay a $14.4 million fine, along with ASIC’s legal costs of $2.1 million.
With Rosherville entering the picture, the target now shifts from the corporation to the individual level. ASX released an official statement confirming that no new legal allegations have been made against the company, though the identities of the former officials targeted by Rosherville remain undisclosed to the public.
This case stands as a key test for Australian corporate law. The public is now waiting to see whether shareholders can force former executives to pay the price for one of the country’s costliest financial technology failures.
Sourced from Cointelegraph.
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