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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.

Parallel Lawsuits Add Pressure

Tuesday’s filing comes just two weeks after Cerebellum Networks co-founder Ken Wang filed a related lawsuit in Delaware’s Court of Chancery, accusing the same defendants of systematically diverting approximately $58 million in Cere token assets.

Wang’s suit names Jin, his wife Maren Schwarzer, his brother Xin Jin, Cere’s chief marketing officer Martijn Broersma, Lime co-founder Brad Bao, and director Francois Granade — all of whom also appear in Goopal’s complaint.

Wang alleged that $41.78 million in token transfers were secretly lined up immediately following the November 2021 ICO, contradicting repeated public assurances that insider tokens were locked.

A Pattern Alleged Across Ventures

According to Goopal and Liu, Liu met Jin in 2019 and joined Cere after being promised a return on her investment and profits tied to the Cere token.

Throughout her involvement, Jin allegedly misrepresented lock-up provisions, claimed Cere had multiple Fortune 500 clients, and assured her that investor funds would be used to develop the platform.

Instead, the suit claims Jin followed a familiar script.

“Unbeknownst to plaintiffs,” the complaint says, Jin allegedly engaged in a recurring pattern of launching ventures, raising funds under false pretenses, extracting insider value, and abandoning the enterprise.

Plaintiffs say the pattern began with mobile gaming company Funler in 2015, continued with education blockchain platform Bitlearn in 2017, and resurfaced with Cere Network in 2019.

Token Transfers and Price Collapse

On the day of the ICO, Cere tokens were allegedly transferred to HTX Exchange and KuCoin Exchange, then sold through accounts controlled by Jin and his associates through Dec. 31, 2021.

Plaintiffs allege the total proceeds reached $41.78 million, which were then routed through intermediate wallets and laundered.

The Cere token hit an all-time high of 47 cents on launch day. According to the complaint, aggressive insider selling caused the price to plunge from $0.45 to $0.06 within weeks.

Today, the token trades at roughly $0.0012, representing a 99.7% collapse from its peak.

“In other words,” the suit states, “the Cere Token is utterly worthless.”

Tokens Promised, Never Delivered

After the ICO, Liu says she repeatedly requested the tokens she was promised, but never received them. To date, neither Liu nor Goopal has obtained their Cere tokens, the complaint alleges.

As a result, plaintiffs argue they were prevented from selling at market prices when the token was near its peak.

Liu is seeking $9.4 million for the value of 20 million tokens she was owed at the time of the ICO, while Goopal is seeking $15.66 million tied to 33.3 million tokens.

Claims and Legal Representation

The lawsuit asserts claims including RICO violations, RICO conspiracy, fraud, aiding and abetting fraud, negligent misrepresentation, and breach of advisory and token sale agreements.

The plaintiffs are represented by John K. Ly and Jennifer L. Chor of Liang Ly LLP.

Representatives for the plaintiffs did not immediately respond to requests for comment Tuesday evening. Counsel information for the defendants was not immediately available.