DWF is demanding $114 million from BitGo, claiming the custodian’s alleged unauthorized token sales caused direct financial losses by triggering price declines.
According to a Financial Times report published Friday, DWF Labs subsidiaries DWF Maas and Falcon Digital have filed a lawsuit against cryptocurrency custody provider BitGo BTGO $7.1400 over an alleged violation of token lock-up agreements.
The two firms allege they sold Falcon Finance tokens FF $0.1069 and ESPORTS tokens to BitGo at discounted prices under contracts requiring the assets to remain locked for three months. The case has been filed with London’s High Court.
Lock-up agreements are commonly used in private cryptocurrency sales to prevent buyers from quickly reselling tokens after acquiring them at a discount. These arrangements help projects raise funds while limiting immediate selling pressure on their assets.
DWF Maas, which is based in the British Virgin Islands, and Panama-based Falcon Digital claim BitGo breached the contracts by selling the tokens before the agreed restrictions expired. They argue that the transactions contributed to significant declines in both tokens’ market values.
Falcon Finance’s FF token fell from around $0.08 when the lock-up started in early March to approximately $0.07 by late April. Over a similar period, ESPORTS dropped from roughly $0.28 in mid-March to $0.07 by early June. DWF is seeking $114 million in damages, arguing that the alleged contract breaches resulted in losses tied directly to the falling token prices.
DWF said the discounted purchase terms depended on BitGo keeping the assets locked. According to the Financial Times, the firm stated that the tokens were transferred to exchanges approximately two months before the first scheduled unlock.
The company also said it contacted BitGo about the issue in April and May. It claims that after receiving no commitment from the custodian, it decided to pursue the matter through the courts.
Separately, DWF invested $25 million in WLFI tokens last year. WLFI is the native cryptocurrency of World Liberty Financial, a digital asset project supported by U.S. President Donald Trump and his family.
That investment prompted concerns among some U.S. lawmakers regarding alleged connections between DWF founder Andrei Grachev and Russia. Grachev served as CEO of cryptocurrency exchange Huobi’s Russian operation from 2018 to 2019. Huobi has been sanctioned in multiple jurisdictions over allegations that it helped Russia bypass Western sanctions.
Neither DWF nor BitGo immediately provided a response to CoinDesk’s request for comment.
