DWF Labs Subsidiaries Sue BitGo for $141 Million Over Early Token Sales

By Decrypt Staff

Two companies tied to crypto market maker DWF Labs have taken BitGo to court, alleging the custodian dumped locked-up tokens early and tanked their value, in a $141 million dispute now before London’s High Court.

DWF Maas and Falcon Digital filed the suit, the Financial Times reported Friday, accusing BitGo of breaching the terms of a private, over-the-counter deal involving Falcon Finance (FF) and ESPORTS tokens.

Myriad: Who wins the midterm elections? Click to make your prediction.

According to the reporting, BitGo had received the tokens at a discount in exchange for a commitment not to sell them until lock-up and vesting periods expired, but instead moved them to exchanges roughly two months before the first unlock.

DWF argues that selling into a thin market created heavy downward pressure, eroding the value of the tokens it still held. The firms say they raised the issue with BitGo in April and May before suing when the company didn’t provide assurances.

BitGo declined to comment, per the report, and the allegations have not been tested in court.

The clash pits two institutional heavyweights against each other. BitGo is one of crypto’s largest custodians, with roughly $5 billion in assets under custody. The company went public on the NYSE this year at around a $2 billion valuation and recently acquired NYDIG’s institutional trading arm.

DWF Labs, headquartered in Dubai, is a prolific market maker and investor across the token economy. A notable thread ties the warring parties together: both have links to World Liberty Financial, the Trump-family-backed crypto venture.

DWF bought $25 million of World Liberty’s WLFI token last year, and BitGo custodies the reserves behind the project’s USD1 stablecoin, a role World Liberty is now moving to take over through its own newly approved trust bank.

Recommended News