Key facts
- DWF Maas and Falcon Digital are suing BitGo for $141 million.
- The lawsuit alleges BitGo sold locked-up tokens early, breaching an OTC deal.
- BitGo allegedly received tokens at a discount with a commitment not to sell before vesting.
- The DWF subsidiaries claim BitGo's early sales negatively impacted token value.
- Both DWF Labs and BitGo have ties to Trump-backed World Liberty Financial.
Two companies tied to crypto market maker DWF Labs, DWF Maas and Falcon Digital, have sued custodian BitGo for $141 million in London's High Court. The firms allege BitGo breached the terms of a private, over-the-counter deal by selling locked-up Falcon Finance (FF) and ESPORTS tokens approximately two months before their scheduled unlock dates.
According to the lawsuit, BitGo received the tokens at a discount with a commitment not to sell them until vesting periods expired. DWF argues that BitGo's early sales into a thin market created significant downward price pressure, eroding the value of tokens the DWF subsidiaries still held. The firms stated they raised the issue with BitGo in April and May before initiating legal action when the company did not provide assurances.
BitGo, one of the largest crypto custodians with about $5 billion in assets under custody, declined to comment on the allegations, which have not yet been tested in court. The dispute highlights connections between the involved parties and World Liberty Financial, a crypto venture backed by the Trump family. DWF Labs invested $25 million in World Liberty's WLFI token last year, while BitGo previously held custody of reserves for World Liberty's USD1 stablecoin.