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Following
ESPORTS 
FF DWG Labs accuses BitGo of violating token lock-up agreement
Two companies associated with DWG Labs have sued cryptocurrency custodian BitGo in the High Court in London for US$141 million. The lawsuit alleges that BitGo sold Falcon Finance and ESPORTS tokens without authorization before the end of the agreed lock-up period.
According to the Financial Times, DWG Maas and Falcon Digital filed the lawsuit. Both companies are affiliated with Dubai-based cryptocurrency market maker DWG Labs and aim to seek compensation for alleged financial losses. Among them, DWG Maas is registered in The British Virgin Islands, while Falcon Digital operates in Panama.
The plaintiff alleges that BitGo violated an over-the-counter trading agreement involving Falcon Finance (FF) and ESPORTS tokens. Under these agreements, BitGo received discount tokens on condition of accepting sales restrictions. The contract provides for a lock-up period of three months first, followed by an additional vesting schedule to control when the tokens enter circulation.
However, DWG Labs accused BitGo of transferring tokens to a cryptocurrency exchange about two months before the planned release date. The plaintiffs argued that the transfers violated contractual obligations and introduced unexpected selling pressure in a market with limited liquidity. These alleged sales allegedly caused token prices to fall, reducing the value of assets that DWG Labs continues to hold. According to reports, a SDL representative raised concerns with BitGo during April and May 2026, but failed to obtain satisfactory guarantees.
Despite this, the parties expressed their willingness to resolve disputes through reconciliation. The dispute involves a restriction clause common in private cryptocurrency transactions, whereby buyers exchange discounts for a delay in selling rights.
DWG Labs claims US$141 million as BitGo expands institutional services
DWG Labs alleges that the alleged early sales caused losses to its remaining Falcon Finance and ESPORTS positions. The plaintiffs are seeking $141 million, although details of the exact damage calculation are unclear. The lawsuit also raised questions about whether the transfer of disputes directly caused the reported price decline. Determining these losses requires a review of transaction records, market conditions, and contractual restrictions governing both tokens.
Falcon Finance belongs to the decentralized finance field, while ESPORTS is related to Yooldo, a Korean blockchain game project. Both assets are subject to agreements designed to control the circulation of tokens during their initial transactions.
Meanwhile, BitGo has been developing financial services for its institutional cryptocurrency customers. In April this year, the company launched a portfolio-based crypto loan service that allows institutions to use digital assets, including locked in tokens, as collateral to lend money. The service enables customers to obtain financing while maintaining backed collateral within BitGo's custody infrastructure.
In addition, BitGo is expanding its regulated international business. In August this year, the company was approved to provide cryptocurrency custody services in South Korea. Through acquisitions, BitGo has also enhanced its institutional trading capabilities. In August this year, BitGo completed a $42.5 million acquisition of NYDIG's institutional trading business, adding derivatives, financing and capital markets services.
These developments are part of BitGo's broader expansion after it goes public in early 2026. However, the London lawsuit involved separate token transactions and contractual obligations associated with these agreements. The court needs to determine whether BitGo violated agreed limits and whether the plaintiff can establish its alleged loss. As of October 9, 2026, no liability determination has been established and the case is still in legal proceedings.
