DWF Maas and Falcon Digital, two firms tied to crypto market maker DWF Labs, have sued custodian BitGo for $141 million in London's High Court. The lawsuit alleges that BitGo sold locked-up tokens early in violation of the terms of a private over-the-counter deal involving Falcon Finance and ESPORTS tokens.
According to the complaint, BitGo received the tokens at a discounted price in exchange for a commitment not to sell them until lock-up and vesting periods expired. The firms claim BitGo instead moved the tokens to exchanges approximately two months before the initial unlock date.
DWF argues that the early sale into a thin market created significant downward pressure on token prices, reducing the value of tokens the firms still held. DWF raised the issue with BitGo in April and May before filing the lawsuit when the custodian did not provide assurances.
BitGo declined to comment on the allegations. The case has not yet been tested in court.
The Parties Involved
BitGo is one of the largest cryptocurrency custodians, holding approximately $5 billion in assets under custody. The company went public on the NYSE this year at around a $2 billion valuation and recently acquired NYDIG's institutional trading arm.
DWF Labs, headquartered in Dubai, operates as a prolific market maker and investor across the cryptocurrency token economy. Both companies have connections to World Liberty Financial, a crypto venture backed by the Trump family. DWF purchased $25 million of World Liberty's WLFI token last year, while BitGo custodies the reserves behind the project's USD1 stablecoin.
