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.
What the Lawsuit Alleges
The dispute centers on two assets: Falcon Finance (FF), which fell from around $0.08 at the start of the lock-up in early March to about $0.07 by late April, and ESPORTS, which declined from about $0.28 in mid-March to $0.07 in early June. DWF Maas, a British Virgin Islands entity, and Panama-based Falcon Digital allege BitGo’s early sales caused direct losses on their remaining token holdings.
BitGo, which became the first digital asset company to list on the New York Stock Exchange in January 2026 under the ticker BTGO, has not responded to the claims, and neither DWF nor BitGo immediately replied to requests for comment. The allegations have not been tested in court.
Why the Custody Dispute Matters
Private token sales with lock-up periods are a standard way for issuers to raise capital while preventing buyers from immediately dumping tokens. A dispute over a custodian’s handling of locked assets could draw scrutiny to how lock-up terms are enforced across the industry, particularly for firms that combine custody with trading and settlement services.
The case adds a new legal front for BitGo, which has expanded through acquisitions and new products this year, including its agreement to buy NYDIG’s trading arm for $42.5 million, and for DWF Labs, whose investment in the Falcon Finance ecosystem includes the Falcon Card payments product.
What Happens Next
Whether the London court accepts the breach-of-contract claim will depend on the specific lock-up terms in the sale agreements, which have not been made public. The outcome could set a reference point for how token lock-ups are treated when custody, trading and settlement are bundled under one provider, but no hearing date has been reported and neither side has detailed its defense or full claim to date.
