ASX Divests Stake in Digital Asset Holdings Following Failed CHESS Project

The Australian Securities Exchange (ASX) has sold its shareholding in Digital Asset Holdings, the technology firm with which it partnered in 2016 for the now-abandoned CHESS replacement project. The sale was concluded for approximately $57 million, and the ASX expects to record a pre-tax gain of about $42 million compared to its current carrying value of the company, with a pre-tax gain of approximately $10 million on its original acquisition cost. These financial impacts will be reflected in the ASX's FY25 results. The purchaser of the stake was not disclosed.

The ASX initially acquired a stake in Digital Asset in 2016 as part of a collaboration to develop a blockchain-based replacement for its equities clearing and settlement system, CHESS. However, the project encountered numerous delays and was indefinitely postponed in 2022 due to various misalignments. The debacle also resulted in a $255 million cost to the ASX from derecognizing capitalized software related to Digital Asset.

At the time of the indefinite delay, former ASX chair Damian Roche stated, "We began this project with the latest information available at that time, determined to deliver the Australian market a post-trade solution that balanced innovation and state of the art technology with safety and reliability." He added, "However, after further review, including consideration of the findings of the independent review, we have concluded that the path we were on will not meet ASX's and the market's high standards. There are significant technology, governance and delivery challenges that must be addressed."

More recently, the ASX has provided an update on its current five-year roadmap for technology modernization. ASX chief executive Helen Lofthouse, speaking at an Investor Forum on Wednesday, June 11, 2025, affirmed that the replacement project has met "several milestones," including the opening of the first industry test environment for Release 1 in February. Lofthouse commented, "It's pleasing to be at the stage in our strategy where we can show steady progress of key deliverables. This is particularly the case for our technology modernisation program and in the way we've been engaging with our customers and stakeholders." She also acknowledged ongoing challenges, noting, "We still have a way to go, and there are areas such as operational risk and business resilience where we are redoubling our efforts and making further investment." The estimated cost for CHESS Release 2 is now up to $320 million, while Release 1 is projected to cost between $105 million and $125 million.