DWF Labs subsidiaries sue BitGo for $141 million over alleged token lock-up breach
DWF Labs subsidiaries have filed a lawsuit against BitGo in London, alleging a breach of contract regarding token lock-up periods. The plaintiffs claim BitGo sold tokens prematurely, causing significant price drops and resulting in $141 million in damages.
Why it matters
This case highlights the legal risks and volatility associated with private token sales and lock-up agreements in the cryptocurrency market.
The two investment subsidiaries of market maker DWF Labs allege they agreed to sell Falcon Finance tokens FF $0.1061 and ESPORTS tokens at a discount to BitGo, which would be subject to a three-month lock-up period, in a lawsuit filed in London’s High Court.
Private token sales are common in the digital asset industry as a means for issuers to raise capital for projects without worrying that buyers will immediately dump the tokens to make a quick buck.
British Virgin Islands-based DWF Maas and Panama-based Falcon Digital claim that BitGo breached its contracts by selling digital tokens before the agreed lock-up periods expired, causing their prices to fall.
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