Two DWF Labs companies have sued BitGo in London for $141mn over discounted tokens they say were sold before the lock-ups expired. The size of the claim will depend on how an English court measures loss in a market with little depth.
On the Financial Times’s figures, Falcon Finance tokens traded at $0.08 in early March when the first lock-up was agreed and at about $0.07 by late April.1 DWF says BitGo sold its discounted allocation into a market DWF describes as highly illiquid and concentrated. It says the tokens went to exchanges roughly two months before the first unlock. Over the same period the reported price moved by a cent. I think that cent is where this case will be fought. A lock-up claim is easy to plead, but its value depends on proving what the price would have been had the tokens stayed locked.
In brief
DWF Maas of the British Virgin Islands and its Panama-based sister company Falcon Digital, both part of the Dubai-headquartered DWF Labs group, have sued BitGo in the High Court in London. They say BitGo bought Falcon Finance and ESPORTS tokens from them at a discount under over-the-counter agreements carrying a three-month lock-up and further vesting restrictions, then sold or moved the tokens before the restrictions ended. They claim $141mn, measured by the fall in value of the tokens they still hold. BitGo has declined to comment and none of the allegations has been tested. The alleged breach is easy to describe, although whether particular transfers breached the agreements will turn on their wording and the transaction evidence. The greater difficulty for DWF is the measure of loss. English law offers it fewer routes round that difficulty than the size of the claim might suggest.
The claim as reported
I have not found a published claim number or any published particulars. Everything below about DWF’s case comes from the Financial Times report and from DWF’s statement to the newspaper. The report quotes the claim.
The agreements were over-the-counter token sales. On the FT’s account of the claim, DWF agreed to sell Falcon Finance tokens to BitGo at a discount, with BitGo’s tokens subject to a three-month lock-up followed by further vesting lock-ups. A second agreement between DWF and BitGo applied the same structure to ESPORTS tokens, which are used in electronic sports and gaming. Deals of this kind let a token’s backers raise money without selling into the open market. The buyer takes the lock-up as the price of the discount and can sell once the restriction lapses.
DWF’s complaint is that BitGo sold both allocations early. The claim describes the Falcon Finance sale as sudden and unexpected and says it “flooded the highly illiquid and concentrated” market, causing a material reduction in price. DWF’s statement to the FT adds that the discount BitGo received was conditional on the tokens remaining locked, that the tokens were moved to exchanges roughly two months before the first unlock and that DWF raised the matter with BitGo in April and May before issuing proceedings when no undertaking was forthcoming.
The most useful detail in the report for assessing the claim is the purpose DWF attributes to the lock-ups. According to the FT, the claim says they were there so that DWF could actively build and launch a number of products during the restricted period and so materially improve the tokens’ liquidity. That purpose bears on what loss BitGo can be taken to have contemplated. It also fixes the counterfactual DWF will have to prove.
The price data in the report comes from CoinMarketCap. Falcon Finance fell from $0.08 in early March to about $0.07 by late April, a fall of 12.5 per cent. ESPORTS fell from about $0.28 in mid-March to $0.07 by early June, a fall of 75 per cent. The FT places the alleged ESPORTS sale at about the time of that June price. The report does not say how the $141mn divides between the two tokens, how many tokens DWF still holds or at what date DWF values them.
The timing in the report is less precise than it first looks. The FT dates the first Falcon Finance lock-up to early March. If its three months ran from that date, the first unlock fell in early June. DWF’s “roughly two months” would then put the transfers in or around early April, before the late April price point. The report does not date the ESPORTS agreement. Its reference to an ESPORTS sale around early June may describe a different interval from the one in DWF’s statement. The particulars will settle the dates for each token. Those dates will drive the damages.
The report does not mention a governing law or jurisdiction clause. The analysis below assumes English law governs the agreements.
Proving loss in a thin market
Construction
Before any question of loss arises, the court has to construe the restriction. The claim, as the FT quotes it, says there is no contractual or legal excuse for BitGo’s conduct in “selling or transferring” the tokens. Pleading transfer alongside sale suggests the agreements restrict movement of the tokens as well as their disposal. That is important for BitGo, which is a custodian by trade. Moving tokens between wallets or onto an exchange account can be an operational step with no sale behind it. A lock-up that catches transfers turns that step into a breach. If the agreements restrict only sales, DWF will have to prove sales. On-chain records of movements to exchange addresses will not do that by themselves.
The further vesting periods raise their own question. If parts of each allocation were due to unlock in stages, a sale made after one stage had vested would be a breach only as to the tranches still restricted. The value of the claim would then depend on matching each sale to a tranche.
Remoteness
On remoteness the pleaded purpose of the lock-ups gives DWF a strong starting point. A buyer who takes a lock-up from a seller holding a continuing position in the same token will find it difficult to say that a fall in the value of that position was outside the parties’ contemplation. Protecting the seller’s remaining holding is the usual commercial reason for a lock-up. The pleaded purpose of building products to improve liquidity points the same way. Whether the agreements and the context of the deal bear that reading out is a question for the evidence.
Causation
Causation is harder. DWF must show what part of each price movement BitGo’s selling caused. Token prices move with the wider crypto market, with news about the project and with the trading of every other holder. In a concentrated market a few holders can move the price on their own.
DWF’s description of the market as highly illiquid and concentrated helps it on one point, because a thin order book magnifies the price effect of a large sale. The same description complicates proof. In a thin market every other large holder’s trading has the same magnifying effect. Each of those holders has to be accounted for before the residual movement can be attributed to BitGo.
The evidence will be on-chain flows and exchange order-book data matched against price, with expert analysis separating BitGo’s sales from everything else trading in the same weeks. The FT describes DWF Labs as a market maker and investor. As with any trading business that sues for market loss, BitGo can be expected to seek disclosure of the claimant group’s own trading in both tokens over the relevant period, so that the expert evidence covers the claimants’ activity as well as its own.
The date of measurement is a further issue. DWF claims for tokens it still holds. Continued ownership does not prevent a fall in value from being a recoverable loss. DWF does not have to sell the tokens to prove it. The court will still have to fix the date at which the fall is measured. A token that has fallen can recover or fall further after that date. The choice of date could move the figure by more than any argument about attribution.
The counterfactual
The counterfactual is where the claim is most exposed. DWF has to show what the tokens would have been worth had BitGo held them for the full lock-up. The pleaded purpose of the lock-ups points to a counterfactual in which DWF’s product launches improved liquidity and lifted the price. That outcome depends on decisions by users, exchanges and other traders.
Where a claimant’s loss depends on the hypothetical actions of third parties, English courts may assess it as the loss of a chance under Allied Maples Group Ltd v Simmons & Simmons, a dividing line the Supreme Court reaffirmed in Perry v Raleys Solicitors.2 The claimant then has to show a real and substantial chance that the third parties would have acted to its advantage. The damages are discounted to reflect the chance. A counterfactual built on product launches and market adoption has an arguable claim to that treatment, since it turns on how users, exchanges and other traders would have responded. A market price is not simply the sum of identifiable third-party decisions, though. The court could equally treat the counterfactual price as a question of valuation, decided on expert evidence on the balance of probabilities. Allied Maples does not dictate the answer. The way DWF pleads its loss and the expert evidence will shape which approach the court takes. On either approach the market effect of products that had not yet been launched will make the counterfactual price hard to establish. Under the first approach the damages would reflect the chance DWF proves. Under the second the court would do its best on the expert evidence. A price built on untested assumptions is likely to be assessed conservatively.
On the Falcon Finance figures a fall from $0.08 to about $0.07 supports a large loss only on a very large retained position. Otherwise DWF’s Falcon Finance claim depends on a counterfactual in which the price would have risen. If neither is the case, most of the $141mn would relate to ESPORTS. The report does not allow the figure to be broken down.
Covenants over land and the price of a release
When loss is hard to prove, claimants suing on negative covenants look for a measure that does not depend on proof of loss. The usual candidate is negotiating damages, the sum the claimant could reasonably have demanded for releasing the defendant from the restriction. The measure takes its older name from Wrotham Park Estate Co Ltd v Parkside Homes Ltd, a case on development carried out in breach of a restrictive covenant over land.3
The Supreme Court restated the principle in Morris-Garner v One Step (Support) Ltd.4 Negotiating damages may be awarded for breach of contract where the claimant’s loss is properly measured by the economic value of the right breached, considered as an asset. That may be the position where the breach results in the loss of a valuable asset created or protected by the right infringed. The examples the Court gave included restrictive covenants over land and intellectual property agreements. The covenants in One Step itself were non-competition and non-solicitation covenants given on the sale of a business. The Court held that the claimant’s loss of profits and goodwill was financial loss of a familiar kind, which could be quantified in the conventional way although quantification was difficult. It sent the case back for a hearing on quantum on that basis. Difficulty in quantifying a familiar kind of loss was no reason to move to the negotiating measure.
If DWF’s loss is a trading loss on its remaining holding, as the FT’s account of the claim suggests, One Step makes negotiating damages a difficult route. The problems of proof already described do not open it. The test asks whether the loss is properly measured by the economic value of the right infringed. A lock-up restrains the buyer, for a period, from competing with the seller as a seller of the same token, which gives it some resemblance to the non-competition covenants in One Step. The answer turns on the right the agreements actually created and on the case DWF pleads.
DWF could argue the other way from the structure of the deal. An OTC buyer accepts a lock-up in exchange for a discount, so DWF could say the lock-up was an asset with an observable value, measured by the difference between the discounted price and the price an unrestricted buyer would have paid. The weakness of that argument is that the discount on an OTC sale may also price other terms and risks, such as the size of the allocation. DWF would have to show that the discount isolates the value of the restriction. The report does not say whether DWF pleads that measure in the alternative. On the FT’s account, DWF pleads direct loss on its retained tokens.
DWF’s statement points to a different claim. It says the discount BitGo received was conditional on the tokens remaining locked. If the agreements make the discount conditional in terms, they may provide for the price to be adjusted, or the discount repaid, if the condition fails. Depending on how such a mechanism is drafted, a claim under it could turn on the contract price and the number of tokens affected and need far less market evidence than the claim on retained holdings. Nothing in the report shows whether the agreements contain such a mechanism. Until the agreements are seen, its availability is an open question.
Where the case goes next
BitGo has not set out its position in public. Its likely lines are the construction of the restriction and the attribution and counterfactual arguments above. On construction, the live point is whether movement to an exchange is itself a breach.
The report mentions no application for an interim injunction, although DWF says it pressed BitGo for an undertaking in April and May. On DWF’s case, once the tokens had been sold there was nothing left for an injunction to protect. The claim then became one for money. Whether any tranches remained unsold and under restriction at that stage is a question the pleadings should answer.
The defence will show how much of the factual account BitGo disputes. If the lock-up terms are as clear as DWF’s statement implies, DWF may consider summary judgment on liability and leave quantum for trial. If the case reaches a public hearing, the standard terms of a discounted OTC token sale and evidence of how both sides performed them could become available for public scrutiny. Disclosure alone would not achieve that. Documents disclosed in English proceedings are subject to a restriction on collateral use. The restriction falls away once a document is read to or by the court or referred to at a public hearing. Even then the court can order that its use be restricted.
The FT observes that these agreements depend on trust between the parties and that their opacity makes them controversial with retail investors, who can be exposed to dumping once vesting periods expire. A judgment in this case would show how far a written lock-up can be enforced once that trust has failed. On the reasoning above, the answer will depend less on the clarity of the restriction than on whether a claimant can prove what a thin market would have done without the breach.
Code on Trial publishes analysis of AI, crypto and digital disputes.
References
1. Nikou Asgari, “Digital asset start-ups in $141mn legal battle over token sales”, Financial Times (print edition, Crypto section). The story was first reported on 9 October 2026. All statements in this piece about the content of the claim, DWF’s statement and the CoinMarketCap price data are taken from this report.
2. Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 (CA); Perry v Raleys Solicitors [2019] 2 WLR 636.
3. Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798.
4. Morris-Garner v One Step (Support) Ltd [2018] UKSC 20 (18 April 2018). See also the Supreme Court’s press summary of the same date.