DWF Labs firms sue BitGo for $141 million in London, saying it dumped locked-up tokens early

Two companies tied to crypto market maker DWF Labs are taking BitGo to court in London over tokens they say the custodian sold too soon. DWF Maas, based in the British Virgin Islands, and Falcon Digital, based in Panama, filed the claim in the High Court, the Financial Times reported on Friday, according to Decrypt and CoinDesk.

The case centres on a private over-the-counter deal. The firms say BitGo bought Falcon Finance (FF) and ESPORTS tokens at a discount, and that the discount depended on the tokens staying locked until their lock-up periods ended. Instead, they allege, BitGo moved the tokens to exchanges about two months before the first unlock, and selling into a thin market drove prices down and hurt the value of the tokens they still held.

CoinDesk said FF slid from about 8 cents in early March to about 7 cents by late April, while ESPORTS fell from about 28 cents in mid-March to 7 cents in early June. The firms say they raised the issue with BitGo in April and May before suing.

Reports put the claim at $141 million. CoinDesk's article also gives a $114 million damages figure without explaining the gap, and the court papers were not available in this run. BitGo declined to comment, according to Decrypt.

Both companies have ties to World Liberty Financial: DWF bought $25 million of WLFI tokens last year, and BitGo custodies the reserves behind the USD1 stablecoin.

What to watch: BitGo's response and the first court filings in the case.