Digital Assets — the New York firm responsible for the now-abandoned Australian Stock Exchange’s blockchain-based clearing system — has blamed the stock exchange for dropping its own blockchain plans.
Meanwhile, ASX representatives again clapped in remarks to Cointelegraph, calling the allegations misleading.
Over the past seven years, the ASX has been on the verge of being the first stock exchange in the world to adopt blockchain technology, which will be in partnership with the New York-based company. However, in a juncture, the ASX announced on May 17 that it would abandon the upgrade and would likely look at more traditional technologies.
According to another a report From Australia, Eric Saraniki, co-founder of Digital Asset, told the June 8 attendees of the Joint Parliamentary Committee on Corporate and Finance that there are two main reasons behind the failure of the blockchain upgrade.
First, Saraniecki alleged that ASX was unwilling to hand over critical 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 fully meet their requirements.”
He said he wasn’t sure why the ASX was so reluctant to hand over such key data, but that it ultimately caused digital assets to have to make “assumptions in a vacuum”.
Secondly, Saraniecki said that while the ASX has been publicly speaking of a “big bang” way to replace the nearly 30-year-old CHESS platform, it has been telling digital assets at the same time to preserve legacy elements from the legacy system. This reportedly led to further disagreement between the two companies and the eventual failure to implement the upgrade.
Concerns were not properly raised, and the ASX defended
However, in comments shared with Cointelegraph, ASX’s non-executive director David Curran said the problem was a lack of communication from the digital asset firm regarding their concerns.
Curran said he made it clear to “senior members of Digital Asset” and others that if there were concerns about the project, there were avenues that should have been raised and resolved.
“I made it very clear to Digital Asset… I had very little patience for software and hardware vendors, who said they weren’t happy doing something but did it anyway, because the customer told them to.”
“If they really think this is wrong, they have mechanisms in place to stop it and actually raise (those concerns). In those conversations, I agreed that it wasn’t done,” Curran added.
Curran explained that he couldn’t speak “too much” about the specifics of this matter due to the nature of the ongoing review.
Helen Lofthouse, managing director and chief executive of ASX, said it wasn’t “flexible requirements” that were causing challenges with the project, but rather the pre-existing requirements of the system itself and the way it relates to how settlements work in Australia.
Lofthouse explained that the November 17, 2022 decision to announce a pause in the upgrade stemmed from the conclusion that the original solution design “wouldn’t be able to do what we needed to do, which was meeting current market demands and giving flexibility.”
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While it was widely-mentioned ASX has completely eliminated blockchain technology, ASX CIO Tim Whiteley Tell Australian technology publication ITNews stated that “no firm decision has been taken”.
“We remain on track to announce a solution design in the fourth quarter of this calendar year and will continue to explore all options for solution design,” Whitley added.
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