Affiliates of digital asset market maker and investment firm DWF Labs have filed a $141 million claim against crypto custodian BitGo in London’s High Court, alleging that restricted altcoin allocations were sold before contractual lock-up and vesting periods expired. The claimants, DWF Maas and Falcon Digital, say the disputed over-the-counter agreements covered Falcon Finance (FF) and ESPORTS tokens, and included an initial three-month lock-up followed by additional vesting restrictions.
The lawsuit was reported by the Financial Times. According to the plaintiffs, BitGo breached those terms by disposing of tokens before the agreed release dates. They argue the premature sales increased circulating supply, contributed to falling token prices, and reduced the value of their remaining FF and ESPORTS positions. The $141 million demand is framed as financial harm caused by the alleged early sales, not simply the market value of the tokens transferred.
BitGo has declined to comment on the litigation, and the allegations have not been proven in court. The case raises a central contractual question: whether a counterparty can recover losses on assets it still holds when another party allegedly releases restricted tokens early. Legal observers note that proving causation will require more than showing a price decline. The court would need the signed OTC agreements, exchange and settlement records, relevant market-depth data, and a clear methodology linking the alleged disposals to the claimed $141 million in damages.
The dispute did not arise between strangers. In June 2025, Falcon Finance announced a planned institutional custody integration with BitGo for USDf, its overcollateralized synthetic dollar. That announcement described custody support, potential staking services and fiat settlement through BitGo’s infrastructure, and identified DWF Labs as a backer. DWF Labs has also described its role in Falcon Finance’s token distribution strategy, exchange listings and market making, identifying itself as the sole market maker for FF. The Financial Times also reported corporate connections involving World Liberty Financial, whose USD1 stablecoin forms part of Falcon Finance’s collateral ecosystem, though World Liberty Financial is not named as a party to the lawsuit.
For institutional participants in private token allocations, the case could become a reference point for how OTC lock-ups, vesting schedules and custody arrangements are drafted and enforced. Clearer restrictions on exchange deposits, lending, collateral transfers and beneficial ownership may become more common if the litigation highlights gaps in private token sale enforcement.
