Two companies affiliated with Dubai-based crypto market maker DWF Labs have sued digital asset custodian BitGo for $141 million in London's High Court, alleging the firm sold locked cryptocurrency tokens before contractual restrictions on their sale had expired. The case concerns Falcon Finance and ESPORTS tokens, which were allegedly offloaded before lock-up and vesting restrictions had run their course, and comes as BitGo continues to expand its institutional crypto custody services.

According to the Financial Times, the plaintiffs — DWF Maas, registered in the British Virgin Islands, and Falcon Digital, which operates from Panama — are seeking compensation for alleged financial losses. They claim BitGo violated over-the-counter agreements covering Falcon Finance (FF) and ESPORTS tokens by transferring them to cryptocurrency exchanges roughly two months before their scheduled release.

FT: DWF Labs Sues BitGo for $141 Million Over Alleged Early Sales of Locked Tokens

According to the Financial Times, DWF Labs affiliates DWF Maas and Falcon Digital have sued crypto custodian BitGo in London's High Court, seeking $141 million in damages. The plaintiffs allege… pic.twitter.com/DIJyoWQlOf

— Wu Blockchain (@WuBlockchain) October 9, 2026

DWF Labs Accuses BitGo of Breaching Token Lock-Up Agreements

Under the terms of the agreements, BitGo allegedly received the tokens at a discount in exchange for accepting restrictions on when they could be sold. The contracts stipulated an initial three-month lock-up period, followed by additional vesting schedules governing when the tokens could enter circulation.

DWF Labs contends that BitGo breached these obligations by transferring the tokens to cryptocurrency exchanges approximately two months ahead of the agreed timeline. The plaintiffs argue that the transfers introduced unexpected selling pressure into markets with limited liquidity, depressing token prices and reducing the value of the assets DWF Labs continued to hold.

DWF representatives reportedly raised concerns with BitGo during April and May but failed to obtain satisfactory assurances, according to the lawsuit. The companies have nevertheless indicated that they remain open to resolving the dispute through settlement.

The disagreement centers on restrictions commonly included in private cryptocurrency transactions, in which buyers receive discounted tokens in exchange for delayed selling rights. Such lock-ups are intended to limit how much new supply reaches markets while liquidity is still forming — the dynamic DWF Labs says worked against its remaining holdings. BitGo has declined to comment on the lawsuit, and the allegations remain unproven in court.

DWF Labs Seeks $141 Million as BitGo Expands Institutional Services

DWF Labs claims the alleged early sales caused losses across its remaining Falcon Finance and ESPORTS holdings. The plaintiffs are seeking $141 million in damages, although the precise calculation of that figure remains unclear.

The lawsuit also raises questions about whether the disputed transfers directly caused the reported price declines. Establishing those losses would require examining transaction records, prevailing market conditions, and the contractual restrictions governing both tokens. The dispute also touches on how lock-up obligations operate once discounted tokens sit with a custodian, since the agreements conditioned BitGo's receipt of the assets on accepting restrictions on when they could be sold.

Falcon Finance operates within the decentralized finance sector, while ESPORTS is associated with Yooldo, a South Korean blockchain gaming project. Both assets were subject to agreements intended to control token circulation during their initial trading periods.

The dispute arrives as BitGo continues to broaden its institutional digital asset offerings. In April, the company introduced a portfolio-based crypto lending service, allowing institutions to borrow against digital assets — including locked tokens — while keeping supported collateral within BitGo's custody infrastructure.

BitGo also expanded its regulated international footprint after receiving approval in August to provide crypto custody services in South Korea. The same month, it completed its $42.5 million acquisition of NYDIG's institutional trading business, adding derivatives, financing, and capital markets services to its institutional trading capabilities.

These developments form part of a wider expansion following BitGo's public listing earlier in 2026. The company also provides custody and settlement services for tokenized assets, including arrangements that allow clients to access digital assets through regulated infrastructure.

The London lawsuit, however, concerns separate token transactions and the contractual obligations attached to those agreements. The court will need to determine whether BitGo violated the agreed restrictions and whether the plaintiffs can establish their claimed losses. As of October 9, 2026, no ruling has established liability, and the case remains subject to ongoing legal proceedings — leaving open whether the dispute ends in the settlement the plaintiffs have said they would consider or proceeds to a ruling in London's High Court.

Source: Blockonomi