Blockchain pioneer Digital Asset Holdings funding round falters

Reports suggest that Blythe Masters, former JP Morgan executive and founder of blockchain technology firm, Digital Asset Holdings, is struggling to complete a $35m funding round. JP Morgan was expected to lead the round with a $7.5m investment and Santander, where Masters is non-executive chairman, was also expected to invest $3m in the round, which was expected to close by Christmas Eve. Reports suggest that the deal stumbled when other large potential investors including Markit, Bank of America, Goldman Sachs, Morgan Stanley, Citigroup, and Nasdaq learned that Digital Asset Holding was offering better terms to JP Morgan than other investors. Concerns also emerged that the firm may have encountered difficulties integrating the technology of start-ups it has acquired.

The newest venture from Blythe Masters, until recently a star banker at JPMorgan Chase, appeared to be an overnight success story in the making.

Her start-up, Digital Asset Holdings, is working in one of the hottest areas of growth on Wall Street today: the blockchain technology that underlies the virtual currency Bitcoin. And Ms. Masters has already received a promise from JPMorgan, her former employer, to be the lead investor on the new project, pitching in around $7.5 million.

But Ms. Masters’s company has been struggling for months to close the deal with other investors. Most recently, large banks including Goldman Sachs and Citigroup have balked at putting money into Digital Asset Holdings after learning that JPMorgan was being given better terms than other investors, according to several people briefed on the deal.

The banks and financial firms looking into investing, the people said, have also expressed doubts about the actual software solutions Ms. Masters’s start-up is working on, much of which has been put together through purchases of smaller start-ups.