DWF Labs affiliates DWF Maas and Falcon Digital have initiated legal proceedings against digital asset custodian BitGo in London, accusing the firm of liquidating discounted FF and ESPORTS tokens ahead of their three-month restriction windows.
The plaintiffs are demanding $114 million in restitution, asserting that BitGo premature liquidations triggered steep declines in token values.
DWF stated that it brought the matter to BitGo attention during April and May, but escalated the dispute to the courts after receiving no formal guarantee.
The legal complaint was lodged in the High Court of London by DWF Maas and Falcon Digital, two investment arms belonging to market maker DWF Labs, targeting cryptocurrency custodian BitGo over alleged violations of sales restrictions.
According to the court filing, these two investment entities agreed to transfer Falcon Finance tokens and ESPORTS assets to BitGo at a reduced rate, contingent upon a mandatory three-month holding period.
Private token placements are frequently utilized within the cryptocurrency sector to allow projects to secure funding without fearing that purchasers will immediately dump the assets for short-term gains.
The British Virgin Islands-registered DWF Maas and Panama-incorporated Falcon Digital assert that BitGo violated contractual obligations by trading the digital assets before the designated restriction dates lapsed, consequently driving down their valuation.
The price of FF dropped from 8 cents when the holding period began in early March down to roughly 7 cents by late April, whereas ESPORTS declined from approximately 28 cents in mid-March to 7 cents by early June. DWF is pursuing $114 million in compensation, arguing that BitGo unauthorized liquidations directly caused the depreciation of both assets.
As noted in the Financial Times coverage, DWF explained that the discounted rate granted to BitGo was tied to the condition that the assets stayed restricted, yet they were transferred to trading platforms roughly two months prior to the initial release date.
The firm added that they addressed the situation with BitGo in April and May, and because no assurance was provided, pursuing litigation became unavoidable.
Previously, DWF invested $25 million in WLFI tokens last year, which serve as the native cryptocurrency for World Liberty Financial, a digital asset initiative supported by President Donald Trump and his relatives.
That financial commitment sparked anxiety among certain legislators in Washington, D.C., regarding purported ties to Russia involving DWF founder Andrei Grachev. Grachev previously directed the Russian division of digital asset platform Huobi from 2018 through 2019. Huobi has faced penalties across multiple regulatory environments for assisting Russia in circumventing Western restrictions.
Neither DWF nor BitGo provided an immediate reply when CoinDesk reached out for statements.
Originally published at https://www.coindesk.com/policy/2026/10/09/dwf-labs-subsidiaries-sue-bitgo-for-usd141-million-over-alleged-token-lock-up-breach.
