DWF Labs Firms Sue BitGo for $141M Over Tokens Sold Before Lock-Up Expired

A market maker's investment arms are taking one of crypto's biggest custodians to court in London — and the whole fight is over tokens that were supposed to stay locked.

DWF Maas and Falcon Digital, both tied to DWF Labs, filed suit against BitGo in London's High Court. They allege the custodian moved Falcon Finance (FF) and ESPORTS tokens to exchanges roughly two months before their three-month lock-up expired. The claim is valued at $141 million, with $114 million of that sought as damages.

What the deal was supposed to be

The arrangement was a private over-the-counter sale, with the tokens handed over at a discount. The single condition attached to that discount was that BitGo would not sell before vesting.

That condition allegedly did not hold. The tokens hit exchanges early, into a thin market that could not absorb the sell pressure. The price action tells the story — FF slid from 8 cents in early March to around 7 cents by late April, while ESPORTS fell from about 28 cents in mid-March to 7 cents by early June.

DWF says it raised the issue with BitGo in April and May. When no undertaking came back, it escalated to the courts.

Why this matters beyond the two firms

Private token sales are how projects raise capital without worrying that early buyers instantly dump their allocation for a quick profit. Break the lock-up, and the discount-for-patience bargain breaks with it.

There is political weight here too. DWF bought $25 million of WLFI tokens last year — the asset of World Liberty Financial, the Trump family-backed project. That investment already drew scrutiny from Washington lawmakers over DWF founder Andrei Grachev's alleged Russia links.

BitGo is not a small target. It custodies roughly $5 billion in assets, listed on the NYSE this year at about a $2 billion valuation, and recently acquired NYDIG's institutional trading arm. Neither company commented to press at the time of the report.

For anyone holding locked tokens or buying into a private round, the takeaway is blunt: "locked" is a contract term, not a technical guarantee. It only means something if someone is willing to sue.