A group of investors has filed a $100 million federal lawsuit accusing San Francisco-based Cere Network and its founder Fred Jin of orchestrating a massive cryptocurrency fraud. The suit alleges misrepresentations about the company's blockchain-based cloud storage technology and a pump-and-dump scheme that devastated token values. Plaintiffs seek $25 million in losses and $75 million in punitive damages.
In a complaint filed this week in federal court, investors led by Lujunjin “Vivian” Liu and her firm Goopal Digital Ltd. have accused Fred Jin, the founder of Cere Network, of leading a fraudulent scheme tied to the company's cryptocurrency token. Cere Network, a San Francisco venture aimed at decentralized cloud data storage using blockchain technology, launched its Cere Token through an initial coin offering in November 2021, raising nearly $50 million from private and public sales.
Liu, an investor from Cupertino, claims Jin pitched her on the project around 2019, promising explosive growth in secure data storage powered by blockchain—similar to systems behind Bitcoin and Ethereum. She alleges Jin hired her as a senior strategic advisor, where she worked 10-20 hours weekly from 2019 to 2021, connecting him with investors and preparing pitch materials in exchange for tokens. Liu and Goopal also purchased Cere Tokens as investors.
The complaint details how Jin assured investors that insider tokens would be locked post-ICO to prevent a market crash, but insiders allegedly sold tens of millions of dollars worth immediately after launch. The token's price plummeted from $0.45 at launch to $0.06 by December 2021 and further to $0.0012 as of this week—a 99.7% drop from its peak.
Further allegations include false claims about adoption by Fortune 1000 companies, the network's technical readiness, and cloud service launch timelines. Plaintiffs describe it as a "pump and dump" operation, with Jin labeled the "ringleader in one of the largest crypto frauds in history." The suit charges fraud and racketeering, among other claims.
John Ly, the plaintiffs' attorney, emphasized the broader impact: “People rely on promises made by tech founders, and, in doing so, they invest enormous amounts of their time and their money into start-ups. When those promises turn out to be false, as alleged in the complaint, both the plaintiffs and the public suffer the consequences.”
Neither Jin, other defendants, nor Cere Network has responded to the allegations or entered an appearance in court.
