DWF Labs Files $141 Million Lawsuit Against BitGo Over Unlocked Token Sales

• DWF Maas and Falcon Digital accuse BitGo of breaching contracts over the early sale of Falcon Finance and ESPORTS tokens.
• The plaintiffs claim the assets were supposed to remain locked, and their sale triggered a price drop.

Crypto firms DWF Maas and Falcon Digital have filed a lawsuit against crypto custodian BitGo in the High Court of London, seeking $141 million in damages, Financial Times reports. 

The plaintiffs allege the company sold Falcon Finance and ESPORTS tokens before the agreed lock-up periods ended, breaching contract terms and causing the assets’ value to fall.

The statement says DWF Maas is registered in the British Virgin Islands, while Falcon Digital is registered in Panama. Both companies are linked to DWF Labs — a market maker and investor headquartered in Dubai. According to the claim, the deals involved buying tokens at a discount on the condition of a three-month lock-up, followed by a gradual vesting schedule.

The core of the dispute

According to DWF, BitGo received Falcon Finance and ESPORTS tokens at a discount in exchange for a commitment not to sell them until the lock-up period ended. However, the assets were allegedly transferred to exchanges about two months before the first unlock.

In the lawsuit, DWF described the sale of Falcon Finance tokens as sudden and unexpected. It says the move put pressure on an illiquid and concentrated market, driving the asset’s price down.

DWF representatives said they raised the issue with BitGo in April and May but did not receive the necessary assurances. At the same time, the company said it remains open to settling the dispute.

According to the filing, the lock-up period was meant to give DWF time to develop and launch a range of products that could significantly improve liquidity for both assets.

DWF is seeking $141 million in compensation, saying the sale of the assets caused it direct losses due to the depreciation of Falcon Finance and ESPORTS tokens that remained in its possession. The company also claims BitGo had no contractual or other legal grounds to transfer or sell the tokens.

As a reminder, earlier KelpDAO filed a lawsuit against LayerZero following a $293 million hack.

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