According to a report by the Financial Times on Friday, two companies associated with the crypto market maker DWF Labs have filed a lawsuit against the custodian institution BitGo in the High Court of London, accusing it of selling locked tokens in advance, which led to a decline in the value of the tokens. The dispute involves $141 million.
The parties who filed the lawsuit are DWF Maas and Falcon Digital. According to reports, the two companies accused BitGo of violating the terms of a private over-the-counter transaction involving Falcon Finance ( FF ) and ESPORTS tokens.
According to reports, BitGo obtained these tokens at a discounted price and promised not to sell them before the end of the lock-up period and ownership period; however, BitGo transferred the tokens to an exchange about two months before the first unlock date.
DWF stated that selling in markets with low liquidity would create significant downward pressure, thereby eroding the value of the tokens they still hold. Both companies mentioned that they had raised this issue with BitGo in April and May, but only filed a lawsuit after the other party failed to provide any guarantees.
It is reported that BitGo has refused to comment, and these accusations have not yet been tested in court.
This conflict has pushed two institutional giants to oppose each other. BitGo is one of the largest custody institutions in the crypto industry, managing assets worth approximately $5 billion. The company went public on the New York Stock Exchange this year with a valuation of around $2 billion and recently acquired the institutional trading division of NYDIG.
DWF Labs, headquartered in Dubai, is an active market maker and investor in the token economy. Notably, both parties involved in the conflict share a common link: they are both associated with World Liberty Financial, an encryption project supported by the Trump family.
DWF purchased $25 million worth of World Liberty tokens WLFI last year, while BitGo is responsible for managing the reserves behind the project's US dollar stablecoin USD1. World Liberty is currently attempting to take over this role through its newly approved trust bank.
