Xapo Execs Lose Bid to Dismiss Breach of Contract Lawsuit

Five Xapo employees, including CEO Wences Casares, have lost their bid to dismiss a lawsuit brought on by their former employer LifeLock.

AccessTimeIconJul 13, 2015 at 7:58 p.m. UTC
Updated Apr 10, 2024 at 3:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Five Xapo employees have lost their bid to dismiss a breach of contract lawsuit brought on by former employer LifeLock.

The update is the latest in a case first brought to light by Fortune when it revealed LifeLock was seeking damages from the defendants, including current Xapo CEO Wences Casares and COO Federico Murrone, related to the development of IP it says would become the foundation of the bitcoin services firm.

has alleged that the defendants did not disclose the "nature and extent" of their role in developing the project, which it argues was created on its computers and using its resources. Xapo has denied the allegations, stating that LifeLock was aware of the project and it relinquished its claim to any technology developed.

LifeLock secured the services of members of the current Xapo team when it purchased Lemon, a digital wallet platform, for $42.6m in December 2013. Xapo has since raised $40m in venture capital, adding former US Treasury Secretary Larry Summers and ex-Citi CEO John Reed to its advisory board in May.

The full filing finds Judge Peter Kirwan overruling objections by the plaintiffs that the breach of contract suit filed by LifeLock be dismissed for lacking sufficient facts. In his notes, the judge also alludes to an agreement allegedly signed between the companies waiving claims to any bitcoin-related technology created.

Kirwan writes:

"The letter thus does not clearly release defendant Casares from any or all of the breaches alleged here, and the demurrer does not lie to only part of a cause of action. Even if it were assumed for purposes of argument that it did, that would not absolve Casares of all potential liability ... Among the fraudulent acts alleged in the third cause of action is that defendant Casares misrepresented his 'personal bitcoin storage business' in order to obtain a letter he could later claim was a release from liability related to his disclosure of confidential information."

The judge goes on to note that LifeLock has alleged Casares "misrepresented" Xapo to obtain a letter he could claim released him from liability for pursuing the venture. LifeLock further has disputed whether its representative had the authority to sign the letter.

The defendants in the case will next be required to attend a hearing on 24th July.

The full text of the filing can be found here.

Businessmen image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.