Two firms affiliated with market maker DWF Labs have sued crypto custodian BitGo in London’s High Court for $141 million, alleging BitGo sold discounted tokens before the agreed lock-ups ended, the Financial Times reported. The claimants are DWF Maas, based in the British Virgin Islands, and Panama-based Falcon Digital. Neither BitGo nor DWF immediately responded to requests for comment from Unchained
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What the Claim Alleges
The claim says BitGo received Falcon Finance (FF) tokens at a reduced price and agreed to hold them for three months, with more vesting restrictions after that. DWF says a matching structure covered ESPORTS tokens, which are used in gaming. Over-the-counter sales let projects bring in funds privately instead of selling into the market, with buyers paying less in exchange for holding.
DWF reportedly said in a statement that the discount was “conditional on the tokens remaining locked” and that the tokens “were moved to exchanges roughly two months before the first unlock.” It said it raised the issue with BitGo in April and May, and that court action followed when BitGo offered no undertaking. “We remain hopeful of, and open to, resolution,” DWF reportedly said in the same statement.
DWF says the holding periods were intended to let it build products that would make the tokens easier to trade. DWF says the sell-offs left the FF and ESPORTS tokens it continues to hold worth less. It says in the filing there is “no contractual or other legal excuse for BitGo’s conduct in transferring or selling” them. The FT reported, based on CoinMarketCap figures, that FF traded at $0.08 in early March and about $0.07 by late April. By early June, when DWF alleges BitGo sold, ESPORTS stood at $0.07, down from about $0.28 in mid-March.
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The post Market Maker DWF Labs’ Affiliates Sue BitGo for $141 Million Over Alleged Early Token Sales appeared first on Unchained.
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