A lawsuit worth $141 million between two subsidiaries of DWF Labs and BitGo centers on alleged violations of token sales restrictions: DWF Maas and Falcon Digital claim that this crypto custody firm sold the FF and ESPORTS tokens obtained at a discount before the end of the three-month lock-up period. The lawsuit between DWF Labs and BitGo also links these alleged early sales to the decline in token prices and their claimed financial losses.

Key Points

• DWF Maas and Falcon Digital have submitted this case to the High Court of London.
• DWF indicates that these tokens entered the exchanges about two months before their first unlocking.
• These two subsidiaries are seeking compensation of $114 million, claiming that these are direct losses.

According to CoinDesk, the two investment subsidiaries of market maker DWF Labs have agreed to sell these tokens to BitGo at a discounted price, with the condition of a three-month lock-up period. DWF Maas is headquartered in the British Virgin Islands, and Falcon Digital is headquartered in Panama.

Contract terms behind the litigation between DWF Labs and BitGo

These two subsidiaries allege that BitGo breached the contract by selling Falcon Finance's FF tokens and ESPORTS tokens before the expiration of the agreed restrictions. Their claim is based on the condition that the discounted prices were linked to the requirement that these assets had to remain locked.

DWF indicates that, according to reports citing the Financial Times, these tokens were transferred to exchanges about two months before their first unlocking. DWF also states that they raised this matter with BitGo in April and May, but only took legal action after receiving no promises.

Claim for damages supported by token price decline

DWF seeks $114 million in compensation, claiming that the sale of BitGo caused direct losses by driving down the prices of two tokens. The $141 million litigation amount mentioned in the report is different from the claimed damages amount.

Reports show that FF was around 8 cents at the beginning of March, when the lock-up period started, and dropped to around 7 cents by the end of April. ESPORTS fell from around 28 cents in mid-March to just 7 cents during the period from mid-March to early June. Both subsidiaries attributed this decline to what they referred to as premature sales.

DWF Investment History Draws Regulatory Attention

One of its past investments is that in 2025, it purchased WLFI worth 25 million US dollars. WLFI is the native token of World Liberty Financial, and this crypto project has received support from US President Donald Trump and his family.

The report stated that this investment raised concerns among some members of Congress in Washington, as there were allegations that the founder of DWF, Andrei Grachev, had connections with Russia. The report pointed out that between 2018 and 2019, Grachev was in charge of Huobi's Russian operations, and Huobi has been sanctioned in multiple jurisdictions for assisting Russia in circumventing Western sanctions.

Comments sent to DWF and BitGo did not receive an immediate response.

This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.