Two companies affiliated with cryptocurrency market maker DWF Labs have filed a $141 million lawsuit against digital asset custody provider BitGo, alleging that the company sold tokens before contractual lock-up periods expired, causing significant financial losses.
The lawsuit, filed in London’s High Court and reported on October 9, 2026, was brought by DWF Maas and Falcon Digital, both linked to Dubai-based DWF Labs. The plaintiffs accuse BitGo of violating over-the-counter (OTC) token sale agreements involving Falcon Finance (FF) and ESPORTS tokens.
According to reports of the legal claim, BitGo allegedly transferred tokens to cryptocurrency exchanges approximately two months before their first scheduled release date. The plaintiffs argue that the premature transactions increased selling pressure, depressed token prices and reduced the value of their remaining holdings.
The companies are seeking approximately $141 million in damages. BitGo has declined to comment on the allegations, which have not been established in court.
Dispute Centers on Token Lock-Up Agreements
The disputed transactions reportedly involved discounted token purchases subject to contractual restrictions designed to prevent immediate selling.
Under the agreements described in the lawsuit, the tokens were subject to an initial three-month lock-up period, followed by a staggered release schedule. These arrangements are common in private cryptocurrency transactions, where institutional buyers receive tokens below prevailing market prices in exchange for restrictions on when they can sell.
DWF Maas and Falcon Digital allege that BitGo failed to honor those restrictions and instead moved tokens onto exchanges before the agreed release schedule permitted them to be traded.
The plaintiffs contend that the resulting selling pressure contributed to declining market prices, leaving their remaining token holdings worth substantially less.
However, establishing liability will require determining whether the disputed transfers violated the contractual terms and whether the alleged transactions directly caused the financial losses claimed.
The available reporting does not establish the precise quantities of tokens involved, the execution prices of individual transactions or how the plaintiffs calculated the full $141 million damages figure.
The case involves Falcon Finance’s FF token and ESPORTS, associated with South Korean blockchain gaming project Yooldo. Their inclusion places two separate token markets within the same contractual dispute.
Lawsuit Highlights Risks in Private Token Transactions
The litigation underscores the financial importance of enforceable vesting schedules and transfer restrictions in institutional cryptocurrency markets.
Unlike conventional exchange transactions, OTC token agreements frequently involve privately negotiated discounts, settlement arrangements and contractual limitations on resale.
These provisions are intended to manage the potential market impact of large token allocations, particularly where liquidity is limited relative to the holdings controlled by institutional investors.
Premature sales can introduce additional circulating supply before the market anticipates it, potentially increasing volatility and weakening prices. However, demonstrating that particular transactions caused specific losses requires evidence beyond the timing of transfers alone.
The dispute also comes as BitGo faces separate litigation connected to its cryptocurrency infrastructure business, including legal proceedings arising from its previously terminated acquisition agreement with Galaxy Digital and securities-related claims associated with its 2026 public listing.
Those matters are legally distinct from the DWF Labs-linked lawsuit.
As of October 9, no court ruling establishing liability in the London case has been reported. The outcome will depend on the interpretation of the underlying agreements, evidence of the alleged transactions and the plaintiffs’ ability to substantiate their claimed damages.