diff --git a/pallets/runtime/tests/src/settlement_test.rs b/pallets/runtime/tests/src/settlement_test.rs
index 11087d5bd..5f1e59bfb 100644
--- a/pallets/runtime/tests/src/settlement_test.rs
+++ b/pallets/runtime/tests/src/settlement_test.rs
@@ -4100,6 +4100,43 @@ fn reject_instruction_as_mediator() {
     });
 }
 
+#[test]
+fn missing_venue_for_offchain_asset() {
+    ExtBuilder::default().build().execute_with(|| {
+        let bob = User::new(AccountKeyring::Bob);
+        let alice = User::new(AccountKeyring::Alice);
+
+        let (asset_id, _) = create_and_issue_sample_asset_with_venue(&alice);
+
+        let legs: Vec<Leg> = vec![
+            Leg::Fungible {
+                sender: PortfolioId::default_portfolio(alice.did),
+                receiver: PortfolioId::default_portfolio(bob.did),
+                asset_id,
+                amount: 1_000_000,
+            },
+            Leg::OffChain {
+                sender_identity: alice.did,
+                receiver_identity: bob.did,
+                ticker: Ticker::from_slice_truncated(b"MYASSET"),
+                amount: 1_000_000,
+            },
+        ];
+        assert_noop!(
+            Settlement::add_instruction(
+                alice.origin(),
+                None,
+                SettlementType::SettleOnAffirmation,
+                None,
+                None,
+                legs,
+                None,
+            ),
+            Error::OffChainAssetsMustHaveAVenue
+        );
+    });
+}
+
 /// Asserts the storage has been updated after adding an instruction.
 /// While each portfolio in `portfolios_pending_approval` must have a pending `AffirmationStatus`, each portfolio in `portfolios_pre_approved`
 /// must have an affirmed status. The number of pending affirmations must be equal to the number of portfolios in `portfolios_pending_approval` + the number of offchain legs,
diff --git a/pallets/settlement/src/lib.rs b/pallets/settlement/src/lib.rs
index 4c82fb54e..9fd34b4e6 100644
--- a/pallets/settlement/src/lib.rs
+++ b/pallets/settlement/src/lib.rs
@@ -230,7 +230,9 @@ decl_error! {
         /// The mediator's expiry date must be in the future.
         InvalidExpiryDate,
         /// The expiry date for the mediator's affirmation has passed.
-        MediatorAffirmationExpired
+        MediatorAffirmationExpired,
+        /// Offchain assets must have a venue.
+        OffChainAssetsMustHaveAVenue,
     }
 }
 
@@ -2055,6 +2057,7 @@ impl<T: Config> Module<T> {
                 amount,
                 ..
             } => {
+                ensure!(venue_id.is_some(), Error::<T>::OffChainAssetsMustHaveAVenue);
                 Self::ensure_valid_off_chain_leg(sender_identity, receiver_identity, *amount)?;
                 instruction_asset_count
                     .try_add_off_chain()