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Crypto market maker DWF Labs’ affiliates DWF Maas and Falcon Digital are seeking $141 million from BitGo in a London High Court lawsuit alleging the custodian sold Falcon Finance and ESPORTS tokens before agreed lock-up periods ended, according to the Financial Times.
The companies claim the sales breached contractual restrictions and drove down the prices of the tokens they continued to hold. The lawsuit concerns private token sale agreements under which BitGo allegedly bought the assets at a discount in exchange for accepting three-month lock-ups and further vesting restrictions.
DWF alleges BitGo transferred its Falcon Finance and ESPORTS tokens to exchanges around two months before the first scheduled unlock. The firm said the Falcon Finance sales unexpectedly flooded a market with limited liquidity and concentrated holdings, contributing to a price decline.
DWF said the lock-up agreements were designed to provide time to develop and launch products intended to improve the tokens’ liquidity. Market data cited in the report showed Falcon Finance falling from around $0.08 in early March to $0.07 by late April.
ESPORTS dropped from approximately $0.28 in mid-March to about $0.07 by early June, when DWF alleges BitGo sold the tokens. DWF is claiming that the transactions caused direct financial losses on its remaining token holdings and said there was no contractual or legal basis for the alleged early sales.
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