DWF Labs subsidiaries DWF Maas and Falcon Digital have initiated legal proceedings against cryptocurrency custodian BitGo in London, seeking $141 million over alleged breaches of token lock-up agreements.
— The investment arms claim BitGo offloaded discounted FF and ESPORTS tokens prior to the expiration of their three-month lock-up windows.
— They are pursuing $114 million in damages, contending that BitGo’s premature sales triggered sharp price declines.
— DWF states it raised concerns with BitGo in April and May but resorted to litigation after receiving no satisfactory assurances.
The two DWF Labs investment subsidiaries assert they had agreed to sell Falcon Finance tokens under specific terms. Private token sales are a standard practice in the digital asset sector, allowing issuers to secure project funding without the risk of immediate token dumping by buyers.
British Virgin Islands-registered DWF Maas and Panama-based Falcon Digital allege BitGo violated contractual obligations by disposing of digital tokens before the agreed lock-up periods concluded, leading to price depreciation. FF declined from 8 cents at the lock-up’s start in early March to approximately 7 cents by late April, while ESPORTS dropped from roughly 28 cents in mid-March to 7 cents in early June.
DWF is claiming $114 million in damages based on the argument that BitGo’s token sales directly caused losses through the fall in both tokens’ values.
«The discount BitGo received was contingent on the tokens remaining locked, yet they were transferred to exchanges approximately two months before the initial unlock,» DWF stated, according to the FT’s report.
«We addressed this with BitGo in April and May, and with no undertaking forthcoming, court action became necessary.»
DWF acquired $25 million worth of WLFI tokens last year, the native asset of World Liberty Financial, the cryptocurrency venture backed by President Donald Trump and his family. The investment sparked concern among some Washington lawmakers regarding DWF founder Andrei Grachev’s alleged connections to Russia.
Grachev served as CEO of crypto exchange Huobi’s Russian division between 2018 and 2019. Huobi has faced sanctions in multiple jurisdictions for allegedly assisting Russia in circumventing Western sanctions.
Neither DWF nor BitGo immediately responded to Decryptnews’s request for comment.
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Why it matters:
Diversified RWA stablecoins sustain 5-7% yield from real credit as crypto funding compresses to ~4%. GENIUS pushes yield off-chain; TAM grows to $4B in 3 years.
