DWF Labs units sue BitGo for $114M in London over alleged token lock-up breach
In brief
- DWF Maas and Falcon Digital sued BitGo in London's High Court, the Financial Times reported.
- BitGo sold discounted FF and ESPORTS tokens before a three-month lock-up expired, the plaintiffs allege.
- DWF is seeking $114 million in damages, according to the report.
- Neither DWF nor BitGo immediately responded to CoinDesk's request for comment.
What DWF alleges
The plaintiffs are British Virgin Islands-based DWF Maas and Panama-based Falcon Digital. They say they agreed to sell FF and ESPORTS tokens to BitGo at a discount, and that the deal came with a three-month lock-up. LeoDex News hasn't seen the High Court filing, so everything here comes from the FT's reporting as relayed by CoinDesk.
DWF alleges BitGo breached its contracts by selling the tokens before those lock-up periods expired (and that the sales pushed prices down). It's seeking $114 million in damages, arguing the sales caused direct losses through the fall in both tokens' prices.
"The discount BitGo received was conditional on the tokens remaining locked, and they were moved to exchanges roughly two months before the first unlock,"
That's DWF's version, given in a statement to the FT. The firm said it raised the issue with BitGo in April and May, and only went to court after no undertaking was given.
Neither company immediately responded to CoinDesk's request for comment.
The price moves
According to CoinDesk, FF fell from 8 cents at the start of the lock-up in March to around 7 cents by late April. ESPORTS took a bigger hit, sliding from about 28 cents in mid-March to 7 cents by June. The claim that BitGo's selling drove those declines is DWF's allegation. It isn't an established fact.
Private token sales are common in crypto. They let issuers raise capital without buyers immediately dumping the tokens they've just bought.
DWF's WLFI ties
DWF isn't a stranger to scrutiny. The firm bought $25 million of WLFI tokens last year, the native asset of World Liberty Financial, the project backed by President Donald Trump and his family. CoinDesk reported that the investment drew concern from some Washington lawmakers over founder Andrei Grachev's alleged links to Russia. Grachev was CEO of crypto exchange Huobi's Russian arm between 2018 and 2019.
