Crypto’s ISDA Moment? BridgePort Aims to Tame Off-Exchange Settlement

NEW YORK, NY – July 14, 2026

The world of institutional digital assets is caught between a tantalizing future and a frustrating present. While billions in capital wait on the sidelines, ready to engage with this new asset class, the market’s underlying plumbing remains a patchwork of bespoke solutions and legal uncertainty. Today, crypto infrastructure firm BridgePort took a significant step toward addressing this friction, announcing the pilot of its Digital Asset Master Agreement (DAMA), a standardized legal framework designed to streamline one of the market’s most critical, yet cumbersome, processes: off-exchange settlement.

The High Cost of Legal Chaos

In the wake of high-profile exchange collapses like FTX, which exposed the immense counterparty risks of leaving assets on a trading venue, off-exchange settlement (OES) has become a non-negotiable for serious institutional players. OES allows trading firms to execute orders on an exchange's books while their assets remain safely segregated with a qualified, independent custodian. The model is a win-win, boosting capital efficiency and dramatically reducing risk.

However, the operational reality has been a tedious slog. For every new relationship, a complex three-way negotiation must unfold between the trading firm, the custodian, and the exchange. These bespoke legal agreements, which must cover everything from collateral management to default procedures, can take months to finalize and incur significant legal costs. This structural inefficiency acts as a major brake on institutional adoption, making it slow and expensive for firms to connect to new sources of liquidity.

"The lack of standardization is a huge drag on efficiency and a source of hidden risk," commented one legal counsel at a digital asset trading firm. "Every agreement is a new battle, and the inconsistencies between them create operational headaches and legal ambiguity, particularly during a crisis."

This is the problem BridgePort, which styles itself as a "middleware coordination layer," aims to solve. The firm, founded by veterans from traditional finance trading desks, is betting that the crypto market has matured enough to embrace the kind of standardization that enabled explosive growth in traditional derivatives markets decades ago.

A Blueprint for Order

BridgePort's DAMA is explicitly inspired by the International Swaps and Derivatives Association (ISDA) Master Agreement, a document that transformed the over-the-counter derivatives market from a Wild West of custom contracts into a globally integrated, multi-trillion-dollar industry. By creating a common legal foundation, the ISDA agreement reduced risk, increased liquidity, and made the market accessible.

BridgePort hopes DAMA can do the same for crypto settlement. "The infrastructure for off-exchange settlement is largely in place," said Nirup Ramalingam, CEO of BridgePort, in the announcement. "The next phase of this market depends on standardizing the legal foundation beneath it, as has happened in every institutional market before. A shared standard lowers the barrier to entry and gives the market room to scale."

The proposed framework provides a comprehensive template covering the core pillars of the OES relationship:

• Custody: It defines how collateral is safeguarded and segregated, clarifying whether it is held in trust or pledged as a security interest.
• Settlement: It standardizes how settlement credit is extended against collateral, how balances are reconciled, and the mechanics of the settlement cycle.
• Operations: It creates procedures for handling operational failures, such as erroneous transfers, failed settlements, or data feed outages.
• Default and Termination: It specifies triggers for default, including venue insolvency, and outlines the process for closing out positions and returning collateral.

Critically, DAMA is not a rigid, one-size-fits-all document. It functions as a configurable template, allowing counterparties to tailor key provisions to their specific commercial, regulatory, and operational needs without starting from scratch. This blend of consistency and flexibility is key to gaining broad acceptance.

The Crowded Race for Infrastructure

BridgePort is not operating in a vacuum. The race to build the essential infrastructure for institutional crypto is heating up, with various organizations tackling standardization from different angles. ISDA itself has been active, publishing its Digital Asset Derivatives Definitions (DADDs) to standardize product terms for crypto options and forwards. While the DADDs focus on the specifics of a trade, DAMA targets the overarching tri-party relationship for settlement, suggesting the two could be complementary.

Other industry bodies, like the International Securities Lending Association (ISLA), have introduced annexes to existing agreements to cover digital assets. Meanwhile, a consortium including ISDA, ISLA, and the International Capital Market Association (ICMA) is promoting the Common Domain Model (CDM), a machine-readable standard for financial products and processes aimed at creating interoperability between traditional and digital markets.

Furthermore, BridgePort's middleware approach competes with the vertically integrated models of large crypto prime brokers and custodians. Firms like Coinbase Prime, Fireblocks, and Zodia Custody offer their own OES networks, providing clients with a one-stop-shop for trading, custody, and settlement. The challenge for BridgePort will be to convince these established players and their clients that adopting a universal, third-party legal standard offers more benefits than relying on their own proprietary systems.

Hurdles to Widespread Adoption

The ultimate success of DAMA hinges on one word: adoption. A standard is only as powerful as its network. While the value proposition is clear, convincing a fragmented and competitive industry to coalesce around a single framework is a monumental task. Legal, operational, and jurisdictional hurdles remain significant, as firms must navigate a patchwork of evolving regulations from the EU's MiCA framework to the latest joint guidance from the US SEC and CFTC.

"Financial markets become more efficient when participants can rely on common standards," noted Steve Bartfield, BridgePort's CPO. He argues that the long-term value extends beyond faster onboarding to include shared legal analysis, operational expertise, and market practices that benefit the entire ecosystem.

To prove its case, BridgePort is now forming a working group of trading firms, custodians, and exchanges to pilot DAMA across live OES relationships. The performance of this pilot—its ability to demonstrably reduce onboarding times, lower costs, and simplify operations—will be the first critical test. The outcome will signal whether the institutional crypto market is truly ready for its ISDA moment and willing to collaborate on building the foundational layers required for its next phase of growth.