A $141 million lawsuit between two subsidiaries of DWF Labs and BitGo centers on alleged violations of token sale restrictions: DWF Maas and Falcon Digital claim that the crypto custodian sold discounted FF and ESPORTS tokens 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 tokens' price decline and the claimed financial losses.
Key points
- DWF Maas and Falcon Digital have filed this case with the High Court of London.
- DWF claimed that these tokens entered the exchange approximately two months before their first unlock.
- The two subsidiaries are seeking $114 million in damages, claiming this amount represents direct losses.
According to CoinDesk, two investment subsidiaries of market maker DWF Labs agreed to sell these tokens to BitGo at a discount, subject to a three-month lock-up period. DWF Maas is headquartered in the British Virgin Islands, and Falcon Digital is headquartered in Panama.
Contractual clauses behind the DWF Labs and BitGo lawsuit
The two subsidiaries allege that BitGo breached the contract by selling FF tokens and ESPORTS tokens from Falcon Finance before the agreed-upon lock-up period expired. Their claim is based on the argument that the discounted price was contingent upon these assets remaining locked.
DWF stated that, according to the Financial Times report cited, these tokens were transferred to exchanges approximately two months before their first unlock. DWF also said it had raised this issue with BitGo in April and May, but only took legal action after receiving no commitments.
Token price decline supports damage claim
DWF is seeking $114 million in damages, claiming that BitGo's sale activities caused direct losses by depressing the prices of two tokens. The $141 million litigation amount mentioned in the report is a different figure from the claimed damages.
Reports show that FF was around 8 cents in early March, at the start of the lock-up period, and dropped to about 7 cents by the end of April. ESPORTS fell from approximately 28 cents in mid-March to just 7 cents by early June. Both subsidiaries attributed these declines to alleged pre-sales.
Regulatory scrutiny arising from DWF's investment history
One of DWF's past investments was the purchase of $25 million worth of WLFI in 2025. WLFI is the native token of World Liberty Financial, a crypto project backed by U.S. President Donald Trump and his family.
The report noted that the investment raised concerns among some members of Congress in Washington, as DWF founder Andrei Grachev has been alleged to have ties to Russia. It stated that between 2018 and 2019, Grachev was responsible for Huobi’s operations in Russia, and Huobi has been sanctioned in multiple jurisdictions for allegedly helping Russia circumvent Western sanctions.
Requests for comment to DWF and BitGo did not receive an immediate response.
This article was generated with the assistance of artificial intelligence and reviewed by the editorial team.