DWF Labs Affiliates Sue BitGo for $141 Million Over Early Falcon Finance (FF) Token Sales

BitGo Faces $141 Million Claim in London

Two companies tied to Dubai-based market maker DWF Labs have filed a $141 million lawsuit against crypto custodian BitGo in London's High Court, alleging the custodian sold locked-up tokens roughly two months before the first unlock. The claimants, DWF Maas and Falcon Digital, say BitGo breached a private over-the-counter agreement covering Falcon Finance (FF) tokens and a matching structure for ESPORTS, a fan token used in gaming. The claim states that BitGo received the FF tokens at a discounted price in exchange for a commitment not to sell for three months, with further vesting restrictions applying after that window. Instead, the filing alleges, the custodian moved the tokens onto exchanges while the lock-up was still running, selling into a thin market and creating heavy downward pressure that eroded the value of the holdings DWF still controls. The Falcon Finance (FF) price had already been softening before the alleged sales, trading near $0.08 in early March and about $0.07 by late April, according to figures cited in the claim. DWF says it raised the issue with BitGo in April and May, and that court action followed once the custodian declined to provide assurances against further sales. In a statement, the firms said the discount was “conditional on the tokens remaining locked” and that they “remain hopeful of, and open to, resolution.” BitGo, which custodies roughly $5 billion in assets and listed on the NYSE this year at a valuation near $2 billion, declined to comment, and the allegations have not been tested in court. The company recently acquired NYDIG's institutional trading arm, extending a custody franchise that spans TradFi and crypto. DWF Labs, headquartered in Dubai, is among the sector's most active investors, and the dispute pits two of crypto's largest institutional names against each other in open court.

Offshore Claimants and the World Liberty Thread

The filing identifies DWF Maas as based in the British Virgin Islands and Falcon Digital as registered in Panama, with both firms operating as affiliates of DWF Labs. The structure at the center of the dispute is standard in private token deals: projects raise funds over the counter rather than selling into the open market, and buyers accept a lower entry price in return for a lock-up. Discounted allocations carrying multi-month vesting are common in SAFT-style deals, where the holding period shields the market from an early supply shock. The claim describes the ESPORTS terms as mirroring the FF arrangement, with the same three-month hold and post-lock-up vesting. DWF says the holding periods were intended to give it time to build products that would make the FF and ESPORTS tokens easier to trade. The claim text states there is “no contractual or other legal excuse for BitGo's conduct in transferring or selling” the assets, and that the sell-offs left the tokens DWF continues to hold worth less. Market data referenced in the filing shows ESPORTS standing at about $0.28 in mid-March; by early June, when the alleged sales took place, the token had fallen to $0.07. A decline of that size on a thinly traded asset is what DWF cites as the damage from the early exchange transfers. A second thread ties the warring parties to the same political crypto venture: both have links to World Liberty Financial, the project backed by the Trump family. DWF Labs bought $25 million of World Liberty's WLFI token last year, while 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. Neither BitGo nor DWF Labs had responded to requests for comment at the time of writing.

A Strict Liability Test for Custodians

Our reading of the claim is that the case turns on one question: whether the discount was a contractual condition tied to the lock-up, as the filing asserts, or a commercial term BitGo was free to trade around. DWF's language, that there was “no contractual or other legal excuse” for the transfers, points toward a strict liability argument rather than one about negligence. Damages will be harder to pin down: DWF must isolate losses caused by the early sales from a market already sliding, with FF near $0.07 by late April. A ruling either way would set a clearer standard for custodians holding discounted token allocations across DeFi and gaming, sectors where lock-ups and vesting schedules carry much of the price support.