Crypto firms DWF Maas and Falcon Digital have filed a lawsuit against crypto custodian BitGo in the High Court of London, seeking $141 million in damages, the Financial Times reports. The plaintiffs allege BitGo sold Falcon Finance and ESPORTS tokens before agreed lock-up periods ended, breaching contract terms and causing the assets’ value to fall.

DWF Maas is registered in the British Virgin Islands, while Falcon Digital is registered in Panama. Both companies are linked to DWF Labs, a market maker and investor headquartered in Dubai.

According to the claim, the transactions involved buying tokens at a discount on condition that they remain locked for three months, followed by a gradual vesting schedule.

The core of the dispute

According to DWF, BitGo received Falcon Finance and ESPORTS tokens at a discount in exchange for a commitment not to sell them before the lock-up period expired. The assets were allegedly transferred to exchanges about two months before the first unlock.

In the lawsuit, DWF described the sale of Falcon Finance tokens as sudden and unexpected. It alleged that the transaction put pressure on an illiquid and concentrated market, driving down the token’s price.

DWF representatives said they raised the issue with BitGo in April and May but did not receive the assurances they sought. The company said it remains open to settling the dispute.

According to the filing, the lock-up period was intended to give DWF time to develop and launch products that could significantly improve liquidity for both assets.

DWF is seeking $141 million in compensation, alleging that the sale caused direct losses through the depreciation of Falcon Finance and ESPORTS tokens that remained in its possession. The company also claims BitGo had no contractual or other legal basis to transfer or sell the tokens.

Separately, KelpDAO earlier filed a lawsuit against LayerZero following a $293 million hack.

Source: Incrypted