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The co-founder and board members of cryptocurrency-linked data cloud company Cere Network have been hit with a sweeping federal lawsuit accusing them of orchestrating a secretive pump-and-dump scheme that allegedly siphoned more than $41 million from investors and employees.

Filed Tuesday in California federal court, the lawsuit paints a picture of a crypto venture that promised decentralization and trust — then allegedly collapsed under insider profiteering.

Allegations of a Coordinated Token Sell-Off

In a 41-page complaint, investor Vivian Liu and her firm Goopal Digital Ltd. accuse Cere Network founder Fred Jin, along with his wife, brother, associates, board members and affiliated shell entities, of manipulating the Cere token market while misappropriating company funds.

The plaintiffs allege they were lured into working for and investing in Cere Network under false pretenses, only to watch insiders quietly cash out while others were locked out.

Cere Network was promoted as a decentralized data cloud platform built on blockchain technology, designed to enhance privacy and security for customer data.

Promises Made Ahead of the Token Launch

According to the complaint, Jin created and marketed what became known as the Cere Token, offering it to employees as compensation and selling it to early investors at discounted rates.

The expectation, the suit says, was that the token’s value would surge once it became publicly tradable on Nov. 8, 2021.

Ahead of that launch, Jin allegedly assured employees and investors that insiders would not sell their tokens early and that all holdings would remain locked under strict vesting schedules for months after the initial coin offering.

The purpose, plaintiffs say, was to signal long-term commitment while reassuring buyers that the market would not be flooded by insider sales.

What Plaintiffs Say Happened Instead

“But this is exactly what Jin did,” the complaint alleges.

While employees and investors remained bound by lock-up provisions, Jin and his alleged co-conspirators secretly sold more than $41 million in Cere tokens on public exchanges shortly after trading opened, transferring the proceeds into personal wallets.

Goopal and Liu further allege that millions of dollars raised for Cere’s operations were funneled into shell entities and accounts controlled by Jin and his associates.

Market Manipulation Claims Surface

The lawsuit also points to alleged market manipulation involving Gotbit Ltd., which plaintiffs say used bots and wash trading to artificially influence trading activity. Gotbit, according to the complaint, was later convicted of wire fraud and market manipulation.

The plaintiffs argue the scope of the alleged misconduct justifies $100 million in compensatory and punitive damages, citing what they describe as a fraud of extraordinary scale.