DWF Labs Sues BitGo for $141 Million Over Alleged Early Token Sales

TLDR:

• DWF Labs affiliates DWF Maas and Falcon Digital sued BitGo for $141 million in London’s High Court.
• The lawsuit alleges BitGo sold Falcon Finance and ESPORTS tokens before their agreed lock-up periods expired.
• The agreements required a three-month lock-up followed by additional vesting restrictions on token sales.
• DWF Labs claims the early sales pushed token prices lower, while BitGo declined to comment.

Two DWF Labs-linked companies have sued crypto custodian BitGo for $141 million, alleging unauthorized sales of locked cryptocurrency tokens. The lawsuit concerns Falcon Finance and ESPORTS tokens, which were allegedly sold before contractual restrictions expired. The dispute comes as BitGo expands its institutional crypto custody services, including arrangements that allow clients to access digital assets through regulated infrastructure.

DWF Labs Accuses BitGo of Breaching Token Lock-Up Agreements

DWF Maas and Falcon Digital filed the lawsuit in London’s High Court, according to the Financial Times. Both companies are affiliated with Dubai-based crypto market maker DWF Labs and are seeking compensation for alleged financial losses. DWF Maas is registered in the British Virgin Islands, while Falcon Digital operates from Panama. The plaintiffs claim BitGo violated over-the-counter agreements involving Falcon Finance (FF) and ESPORTS tokens.

Under the agreements, BitGo allegedly received discounted tokens in exchange for accepting restrictions on their sale. The contracts included an initial three-month lock-up period, followed by additional vesting schedules controlling when tokens could enter circulation.

However, DWF Labs alleges that BitGo transferred the tokens to cryptocurrency exchanges approximately two months before their scheduled release. The plaintiffs argue that these transfers breached contractual obligations and introduced unexpected selling pressure into markets with limited liquidity.

According to the lawsuit, the alleged sales reduced token prices and lowered the value of assets DWF Labs continued holding. DWF representatives reportedly raised concerns with BitGo during April and May but failed to obtain satisfactory assurances.

The companies have nevertheless indicated they remain open to resolving the dispute through settlement. The disagreement concerns restrictions commonly included in private cryptocurrency transactions, where buyers receive discounts in exchange for delayed selling rights.

BitGo has continued expanding its digital asset operations, including custody and settlement services for tokenized assets. The company declined to comment on the lawsuit, and the allegations remain unproven in court.

DWF Labs Seeks $141 Million as BitGo Expands Institutional Services

DWF Labs claims the alleged early sales caused losses across its remaining Falcon Finance and ESPORTS holdings. The plaintiffs are seeking $141 million, although the precise calculation of damages remains unclear.

The lawsuit also raises questions about whether the disputed transfers directly caused the reported price declines. Establishing those losses would require examining transaction records, market conditions, and the contractual restrictions governing both tokens.

Falcon Finance operates within the decentralized finance sector, while ESPORTS is associated with South Korean blockchain gaming project Yooldo. Both assets were subject to agreements intended to control token circulation during their initial trading periods.

Meanwhile, BitGo has continued developing financial services for institutional cryptocurrency clients. In April, the company introduced portfolio-based crypto lending, allowing institutions to borrow against digital assets, including locked tokens.

The service enables clients to access financing while keeping supported collateral within BitGo’s custody infrastructure. BitGo also expanded its regulated international operations after receiving approval to provide crypto custody services in South Korea in August.

The company has also increased its institutional trading capabilities through acquisitions. In August, BitGo completed its $42.5 million acquisition of NYDIG’s institutional trading business, adding derivatives, financing, and capital markets services.

These developments form part of BitGo’s wider expansion following its public listing earlier in 2026. However, the London lawsuit concerns separate token transactions and the contractual obligations attached to those agreements.

The court will need to determine whether BitGo violated the agreed restrictions and whether the plaintiffs can establish their claimed losses. As of October 9, 2026, no ruling has established liability, and the case remains subject to legal proceedings.

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