The bitcoin startup that hired former Nike CIO Anthony Watson has now added the sportswear giant’s security chief, William Dennings, to its ranks. The move comes amid a lawsuit between Nike, Mr. Dennings and his former employer, MasterCard International, that highlights the fierce battle for top cybersecurity talent.

Mr. Dennings joined Bitreserve this month as the startup’s first CISO, Mr. Watson said in a statement on the company’s website. There, Mr. Dennings will “spearhead the company’s security and data protection infrastructure,” the statement said.

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Prior to joining Nike, Mr. Dennings was chief information security officer at MasterCard.

The credit card company sued Nike in January, alleging that the sportswear company conspired with Mr. Dennings and another security manager, Ryan Fusselman, to poach cybersecurity talent. The suit claims that both executives, who joined Nike in 2013, broke non-solicitation agreements and non-disclosure contracts by subsequently hiring MasterCard employees who worked in information security.

MasterCard filed new charges in March, claiming ongoing IT damages. Among the new allegations, MasterCard said Mr. Dennings “reconfigured Nike’s network to resemble that of MasterCard using MasterCard’s confidential information.” The credit card company has demanded at least $5 million in damages.

The amended complaint also adds details about the colleagues allegedly lured away – eight key employees in MasterCard’s 135-member information security department.

Nike plans to file a motion to dismiss the suit this week, a company spokesperson told CIO Journal.

The lawsuit and executive move underscores the competitive landscape around cybersecurity talent. Skilled, experienced CISOs are in high demand, said Craig Stephenson, managing director of the North American CIO practice at executive recruiter Korn Ferry. “Firms across all industries are being stressed every single day to make sure information is protected. You need an individual with the ability to deal with dynamic situations,” Mr. Stephenson said.

Mr. Stephenson declined to speculate on the executive movement between MasterCard, Nike and Bitreserve. However, he said, companies looking to lure experienced security leaders offer 20% to 40% compensation boosts. “We spend a lot of time with clients making sure they stay close to the individual in that role,” he said. “Compensation, visibility, whatever it takes to make sure that individual is happy.”

Mr. Watson, now Bitreserve’s president and COO, left Nike in December after less than a year with the company, citing personal reasons.

Founded by Internet entrepreneur Halsey Minor, Bitreserve is a cloud-based financial platform that lets users access, hold and move currencies and commodities without traditional banks. The company is responsible for $13 million of transactions globally, its website says.

“I'm excited to join Bitreserve at a time when the company is establishing itself as a leading cloud money service," Mr. Dennings said in the statement. "Information security extends well beyond IT and customer service in the global payments sector. It's vital to the secure, instant, easy and free movement of money that Bitreserve offers our members."

Write to steven.norton@wsj.com