We use the introduction of ASX Centre Point (CP) – a midpoint dark trading venue – as an exogeneous shock to high-frequency trading (HFT) activity to study liquidity in the Australian stock market. We construct HFT proxies from order book data for ASX200 constituent stocks and analyse the market quality effect of the June 2010 CP introduction. Our results demonstrate that HFT activity increased significantly as the market fragmented. The higher HFT activity is associated with a deterioration in lit market quality, indicated by reduced displayed depth and no improvement in quoted spreads. These adverse effects are partially mitigated by passive HFT activity in stocks with higher relative tick sizes. Our study contributes to understanding the influence of midpoint dark venues on HFT strategies and market quality in lit venues.