New York-based Digital Asset Holdings, LLC, a blockchain startup headed by former JPMorgan banker Blythe Masters, has raised $52 million from major financial services firms. Investors included ABN AMRO, Accenture, ASX Limited, BNP Paribas, Broadridge, Citi, CME Ventures, Deutsche Börse, ICAP, JPMorgan, Santander InnoVentures, DTC and PNC.
“These investments represent a tremendous endorsement of Digital Asset from banks, exchanges, settlement and clearing firms, central securities depositories, and market infrastructure and professional services providers,” said Blythe Masters, CEO of Digital Asset.
Australia’s stock exchange ASX also announced that it has selected Digital Asset to develop solutions for the Australian market utilizing distributed ledger technology. In February 2015, ASX announced that it would replace or upgrade all of its main trading and post-trade platforms. Phase 1 of the program runs to the end of 2016 and will replace ASX’s existing trading and risk management systems. Phase 2 focuses on ASX’s post-trade services, including clearing and settlement of the cash equities market. The system that currently provides the clearing and settlement services to the Australian equity market is known as CHESS. ASX will work with Digital Asset to design a new post-trade solution for the Australian equity market.
Distributed ledger technology is also referred to as blockchain. The standards that apply to regulated financial markets mean that the design of a solution will differ from the publicly available blockchain. The architecture will be based on a private network whereby all parties that participate will be permissioned to do so – as they are today when they connect to CHESS.
Launched in 2015, Digital Asset’s mission is to improve efficiency, security, compliance and settlement speed while reducing costs through the implementation of distributed ledger technology. Its products serve the entire financial ecosystem through the creation of tailored business logic applications using privately permissioned networks that employ a cryptographically secure and shared infrastructure. Digital Asset software has the potential to significantly improve post-trade processing efficiency and security, while reducing cost, latency, errors, risk and capital requirements.
“We are proud to be a lead investor in this round of financing,” said Sanoke Viswanathan. Chief Administrative Officer of JPMorgan’s Corporate & Investment Bank. “Distributed Ledger Technology has the potential to transform the way our industry does business, and we believe Digital Asset has the right talent and technology to make it a reality.”
Elmer Funke Kupper, ASX Managing Director and CEO, said: “ASX believes that Australia can be a world leader in the development of innovative post-trade solutions. Our investment in Digital Asset represents a commitment to sizing the potential of Distributed Ledger Technology to reduce cost, risk and complexity for ASX’s broad stakeholder base, including issuers, investors, intermediaries and regulators.”
Tim Gokey, Chief Operating Officer, Broadridge Financial Solutions said: “We are delighted to be a strategic investor in Digital Asset and we look forward to continuing to build differentiated solutions that will help our global clients achieve their growth and operational goals.”
Mike Bodson, President & CEO of DTCC, said “This investment positions DTCC to play a leading role in fostering industry-wide adoption and helping to introduce the standards, governance and technology to support distributed ledger implementations. We look forward to working with our partners at Digital Asset to explore opportunities to improve upon the existing infrastructure in certain defined areas where automation is limited or non-existent and where the technology provides a clear benefit over existing processes.”
Sandler O’Neill + Partners, L.P. served as Digital Asset’s placement agent in the transaction, and Sullivan & Cromwell LLP served as Digital Asset’s legal advisor in the transaction.
Digital Asset also announced that it is expanding its Board of Directors to nine members. The Board will be comprised of Catherine Flax, Head of Commodity Derivatives and Foreign Exchange & Local Markets, Americas of BNP Paribas, Ashwin Kumar, Group Head of Product Development of Deutsche Börse Group, Sanoke Viswanathan, Chief Administrative Officer of JPMorgan’s Corporate & Investment Bank, and Mike Bodson, President & Chief Executive Officer of DTCC, who will join Blythe Masters, Donald Wilson, Sunil Hirani, Cristóbal Conde and an additional director who will be named shortly.
Digital Asset is headquartered in New York, and has offices in San Francisco, Tel Aviv, and Budapest. It recently announced the addition of a London office.
Blythe Masters spent 27 years at JPMorgan Chase and rose to managing director at the age of 28. She has served in numerous senior positions at the firm including head of global commodities, CFO of JP Morgan Investment Bank, head of global credit portfolio and credit policy and strategy, in addition to other senior roles. She was on the board of SIFMA for multiple years in addition to chairing the association for two consecutive years. Additionally, she was chair of GFMA from 2012-2014. She is currently on the board of The Breast Cancer Research Foundation and the Global Fund for Women. She is also the chair of the board of Santander Consumer USA Holdings Inc.