The background is that Caseres previously ran Lemon, a digital wallet start-up that was later sold to LifeLock at the end of 2013. Casares and most of the Lemon team became LifeLock employees. LifeLock claims that Casares started Xapo by “using a product developed by Lemon employees, in Lemon’s facilities, on Lemon’s computers, and on Lemon’s dime.” Casares initially pushed to have the case thrown out, but a judge in Silicon Valley disagrees, and the lawsuit against current Xapo CEO will move forward.
The case could have serious ramifications for Xapo, who are considered one of the hottest Bitcoin start-ups in the country. Casares is arguing that LifeLock originally had no interest in Lemon’s Bitcoin-related assets. He claims to have a letter from a LifeLock executive which testifies to this effect, but whether this will stand up in court as a significant legal defense remains to be seen.