DWF Labs Subsidiaries Sue BitGo for $141M Over Token Lock-Up Breach
DWF Labs subsidiaries have filed a lawsuit against cryptocurrency custodian BitGo, alleging the firm sold tokens before their scheduled lock-up periods expired. The plaintiffs claim these unauthorized sales caused significant price drops in their holdings, resulting in $141 million in damages.
Why it matters
This case highlights the legal and operational risks associated with digital asset custody and the enforcement of token lock-up agreements in the crypto industry.
DWF Labs subsidiaries DWF Maas and Falcon Digital have sued cryptocurrency custodian BitGo in London’s High Court, seeking $141 million over claims the firm sold discounted Falcon Finance and ESPORTS tokens before their three-month lock-up periods expired, according to a report from CoinDesk . The lawsuit, first reported by the Financial Times on October 9, alleges the early sales pushed down the tokens’ prices while the two investment vehicles still held large positions.
The plaintiffs claim the discount BitGo received on the private token sales was conditional on the assets remaining locked, but that BitGo moved the tokens to exchanges roughly two months before the first scheduled unlock. DWF said it raised the issue with BitGo in April and May and pursued court action after the custodian did not provide an undertaking, seeking $114 million in damages tied to the price declines.
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