DWF Labs affiliates DWF Maas and Falcon Digital have sued crypto custodian BitGo for $141 million in London's High Court, alleging BitGo breached contractual lock-ups by selling discounted Falcon Finance and ESPORTS tokens early. The plaintiffs claim early market sales caused Falcon Finance to drop to $0.07 and ESPORTS to collapse from $0.28 to $0.07, depressing token values. Both firms share deep ties to the Donald Trump-backed crypto venture World Liberty Financial.
Details of the lawsuit against BitGo
- ▪DWF Maas and Falcon Digital allege BitGo breached contract terms by moving discounted Falcon Finance and ESPORTS tokens to exchanges roughly two months before their agreed three-month lock-up periods expired
- ▪DWF Maas and Falcon Digital filed a lawsuit in London's High Court seeking $141 million in damages from cryptocurrency custodian BitGo
- ▪DWF Maas, based in the British Virgin Islands, and Panama-based Falcon Digital are investment subsidiaries of Dubai-headquartered market maker DWF Labs
DWF Labs' response and impact on asset value
- ▪DWF Labs stated that token lock-up periods were established to allow time to build and launch products to improve asset liquidity
- ▪DWF Labs affiliates raised concerns about premature token transfers with BitGo in April 2026 and May 2026 before filing the $141 million legal action in London's High Court
- ▪DWF Labs asserts BitGo's early token sales into an illiquid market caused price drops that devalued the remaining Falcon Finance and ESPORTS token holdings DWF retained
Price declines in affected tokens
- ▪ESPORTS tokens dropped from approximately $0.28 in mid-March 2026 to $0.07 by early June 2026
- ▪Falcon Finance tokens fell from $0.08 in early March 2026 to about $0.07 by late April 2026, according to CoinMarketCap data
Mechanics of over-the-counter token sales
- ▪Private over-the-counter deals allow crypto projects to raise capital without risking price suppression from dumping assets on public markets
- ▪In over-the-counter token sale agreements, buyers receive discounted digital assets in exchange for agreeing to lock-up and vesting periods that prevent immediate market sales
World Liberty Financial investments
- ▪DWF Labs purchased $25 million worth of WLFI tokens issued by Donald Trump-backed World Liberty Financial in 2025
- ▪World Liberty Financial invested $10 million into Falcon Finance in July 2025 to work on conversions between USDf and USD1
BitGo's role with World Liberty Financial
- ▪World Liberty Trust Company received preliminary conditional approval from the Office of the Comptroller of the Currency on August 14, 2026 to take over issuance of World Liberty's USD1 stablecoin from BitGo
- ▪BitGo serves as custodian and issuer for World Liberty Financial's USD1 stablecoin, which has nearly $4.3 billion in circulation across Ethereum, BNB Chain, Solana, and Tron
Debatable claims
- ▪US regulators should scrutinize foreign-linked market makers involved in politically affiliated crypto ventures
- ▪Private over-the-counter token sales with lock-up discounts cause more harm than good to crypto markets
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