Australian Securities Exchange is working with Digital Asset to convert part of its settlement process to blockchain, invests in the startup's $35M Series C
Ian Allison / CoinDesk :
Context & Ripple Effects
Digital Asset's tie to the Australian Securities Exchange goes back to January 2016, when the startup's $52M raise at a reported $100M valuation came alongside the partnership to build a distributed-ledger replacement for the exchange's clearing and settlement system; an October 2017 Series B lifted its total funding to $110M.
Today's news doubles down on that structure: ASX is both converting part of its settlement process to Digital Asset's technology and writing a check into the startup's $35M Series C. The later record shows how the bet resolved — ASX dropped the project in November 2022 with a $165M–$172M write-off, ruled out a blockchain rebuild by May 2023, and by August 2024 faced a regulator lawsuit over the botched upgrade.
First-order effects
- ASX now occupies both sides of the deal — investor in Digital Asset's Series C and customer migrating part of its settlement process onto the startup's ledger technology.
- The $35M round pushes Digital Asset's cumulative fundraising well past the $110M it had amassed through its 2016 and 2017 rounds, with its flagship customer anchoring the cap table.
Second-order effects
- A national exchange wiring post-trade infrastructure to a single startup turns Digital Asset's delivery roadmap into a systemic dependency — any slip lands directly on ASX's clearing and settlement timeline rather than on a replaceable vendor.
- Other exchanges weighing distributed-ledger upgrades face the same build-versus-buy calculus ASX just made, with customer-investor deals like this one becoming the reference template for vendor selection.
Third-order effects
- The corpus shows the structural endpoint of this pattern: seven years of development ended in abandonment, a nine-figure write-off, and securities-regulator litigation against the exchange itself — meaning the downside of failed infrastructure overhauls is borne by the market operator and its users, not the venture-backed vendor.
- If regulators treat botched technology migrations as enforcement matters, exchanges gain a durable incentive to stage such conversions incrementally rather than committing their core settlement stack to one supplier.
The trend: Stock exchanges re-plumbing post-trade systems around distributed-ledger vendors through customer-investor deals like ASX–Digital Asset, a pattern whose documented failure mode runs from write-off to regulatory lawsuit.