Two companies tied to crypto market maker DWF Labs have sued BitGo in London’s High Court in a $141 million dispute, alleging the custodian sold locked tokens early and damaged their value.
Claims center on FF and ESPORTS token deal
The Financial Times reported Friday that DWF Maas and Falcon Digital filed the lawsuit over an alleged breach of a private over-the-counter agreement involving Falcon Finance (FF) and ESPORTS tokens.
According to the report, BitGo received the tokens at a discount in exchange for a commitment not to sell them until the lock-up and vesting periods had expired. The plaintiffs claim BitGo instead moved the tokens to exchanges roughly two months before the first unlock.
DWF argues that selling into a thin market created significant downward pressure and reduced the value of the tokens it continued to hold. The firms said they raised the issue with BitGo in April and May before filing suit after the company did not provide assurances.
BitGo declined to comment
BitGo declined to comment, according to the Financial Times. The report also said the allegations have not been tested in court.
The case sets up a dispute between two large institutional players in crypto. BitGo is one of the sector’s biggest custodians, with about $5 billion in assets under custody. The company went public on the New York Stock Exchange this year at around a $2 billion valuation and recently acquired NYDIG’s institutional trading arm.
Both sides have ties to World Liberty Financial
DWF Labs, which is headquartered in Dubai, is an active market maker and investor across the token economy. The report noted another connection between the parties: both DWF Labs and BitGo have links to World Liberty Financial, the Trump-family-backed crypto venture.
DWF bought $25 million of World Liberty’s WLFI token last year. BitGo serves as custodian for the reserves backing the project’s USD1 stablecoin, although World Liberty is now moving to take over that role through its own newly approved trust bank.
