Cere Network CEO Fred Jin and Lime co-founder Brad Bao are facing a second federal racketeering lawsuit, bringing total claimed damages against the pair and their associates to $157 million. The new complaint identifies Jin as the alleged architect of a cryptocurrency fraud scheme that cost investors tens of millions of dollars, with Bao accused of lending his mainstream credibility to the project and approving key financial transactions. Proceeds from the scheme were partly laundered through a market-making firm whose founder has since been convicted in a federal sting operation.
According to the complaint filed in U.S. District Court for the Northern District of California (Case No. 3:26-cv-01235), San Francisco investor Josef Qu is seeking $57 million in damages from Jin, Bao, and several other individuals and corporate entities. The filing brings ten causes of action including RICO, securities fraud under the Securities Exchange Act, and theft.
The new case arrives just weeks after a separate $100 million racketeering suit was filed against the same defendants by investor group Goopal Digital Limited (Case No. 3:26-cv-00857). Together, the two federal lawsuits allege a coordinated pump-and-dump scheme centered on Cere Network, a blockchain platform that raised approximately $42.96 million from over 5,000 retail investors, many of whom purchased tokens through the Republic platform.
Securities fraud claims and expanded legal theories
The Qu complaint significantly expands the legal theories deployed against the defendants. The first Goopal lawsuit asserted six claims: RICO, RICO conspiracy, fraud, aiding and abetting fraud, negligent misrepresentation, and breach of advisory and token sale agreements. The new filing adds four additional claims, most notably securities fraud under Section 10(b) and Section 20(a) of the Securities Exchange Act, along with civil theft and breach of the implied covenant of good faith and fair dealing.
Section 10(b) prohibits the use of manipulative or deceptive devices in connection with the purchase or sale of securities. Section 20(a) imposes liability on individuals who control entities that violate securities laws. The complaint alleges that Jin, as CEO and primary decision-maker, made material misrepresentations to investors about how funds would be used, the lockup restrictions on insider tokens, and the financial health of the project. Bao, as a board member and controlling person of the entity, faces Section 20(a) liability for allegedly approving and enabling Jin’s conduct.
SAFT investors allege they never received any tokens
Plaintiff Josef Qu invested in Cere Network through a Simple Agreement for Future Tokens in 2019. That agreement entitled him to 27,777,778 CERE tokens. According to the complaint, Qu never received any of his tokens despite confirmed entitlement and repeated requests. The filing alleges that Jin personally controlled the token distribution process and withheld investor allocations even as he and other insiders moved their own tokens to exchanges and began liquidating within hours of the November 2021 launch.
The CERE token reached an all-time high of $0.47 on launch day before collapsing. It now trades at approximately $0.00061, a decline of more than 99.8 percent. The first lawsuit’s plaintiffs tell a similar story: Vivian Liu and Goopal Digital claim they were owed a combined 53.3 million tokens and received none.
Blockchain evidence and $16.6 million in DeFi losses
The new complaint cites specific Etherscan transaction records purporting to show the movement of tokens and funds from corporate wallets, providing a forensic-level paper trail that goes beyond the general allegations in the first lawsuit.
The filing provides a detailed accounting of approximately $16.6 million in losses from what it describes as unauthorized, high-risk decentralized finance investments made with investor capital: $6.51 million in the Mochi Protocol, $3.27 million in a CVX/ETH liquidity pool, $780,000 in Maple Finance, and $345,000 in the Neutrino USDN protocol. The complaint alleges Jin directed these investments without investor consent or disclosure, characterizing them as reckless bets that no fiduciary should have made with funds entrusted by investors.
Both lawsuits allege that additional funds were routed through a network of shell companies registered in Delaware, the British Virgin Islands, Panama, and Germany, and trace proceeds into personal accounts controlled by Jin, his wife Maren Schwarzer, and his brother Xin Jin. The total alleged insider sell-off across both complaints amounts to approximately $41.78 million.
Gotbit connection and wash trading allegations
Both complaints allege that Jin and his associates engaged Gotbit Ltd., a crypto market-making firm, to deploy automated trading bots that conducted wash trading, generating fake volume to disguise the insider sell-off. The Qu complaint adds new detail by citing blockchain evidence showing token movements from corporate wallets to exchange wallets on the first day of trading.
Gotbit’s founder, Aleksei Andryunin, was subsequently convicted of wire fraud and market manipulation as part of the U.S. Department of Justice’s Operation Token Mirrors, a federal sting operation targeting crypto market manipulation.
Jin’s alleged role as architect of the scheme
The complaint identifies Jin as the central figure behind the alleged fraud. As CEO and co-founder of Cere Network, Jin allegedly controlled the treasury wallets, directed the Gotbit wash trading arrangement, authorized the high-risk DeFi investments that lost $16.6 million, and personally oversaw the movement of investor funds into accounts held by himself, his wife Maren Schwarzer, and his brother Xin Jin. The filing describes Jin as having final authority over all major financial decisions at Cere Network from its inception through the alleged scheme.
Jin also allegedly made direct misrepresentations to investors about how their capital would be deployed, the status of lockup agreements on insider tokens, and the overall financial health of the project. The complaint states that Jin personally assured investors their tokens were subject to vesting schedules while simultaneously moving insider allocations to exchanges for immediate liquidation on launch day.
Bao’s alleged role and prior litigation
Bao co-founded Lime in 2017, building it into one of the most recognizable micro-mobility companies in the world, operating in more than 280 cities. His involvement with Cere Network came through a position on the company’s board of directors. Both lawsuits allege that Bao received director’s fees and early token allocations, lent his name and mainstream credibility to the project to attract investors, and approved financial transactions that moved funds into accounts controlled by Jin.
Under the Section 20(a) securities fraud claim in the new complaint, Bao faces liability as a controlling person of an entity alleged to have violated federal securities laws, a legal theory that treats his board role as more than nominal.
Bao has faced prior litigation, including a fraud action involving the City of San Francisco and a separate lawsuit brought by venture firm Khosla Ventures alleging fraud and intentional interference tied to a collapsed $30 million acquisition deal.
Jin’s alleged pattern of failed ventures and new AI company
The new filing details what it describes as a pattern of prior fraudulent ventures by Jin. Before Cere Network, Jin allegedly ran a project called Funler, later rebranded as Funler Chain, between 2016 and 2018. The complaint alleges that Funler raised approximately $10 million from investors before its token lost roughly 95 percent of its value. A subsequent venture called Bitlearn, launched in 2018, allegedly followed an identical trajectory.
The complaint further alleges that Jin has since launched a new artificial intelligence venture, CEF AI Inc., funded with proceeds from the alleged Cere Network fraud. The plaintiff is seeking a constructive trust over CEF AI’s assets and has requested injunctive relief to freeze the company’s holdings, alongside Jin’s cryptocurrency wallets, bank accounts, and luxury real estate in Germany and Florida.
Named defendants and case details
In addition to Bao and Jin, the named defendants include Maren Schwarzer, Xin Jin, Cere CMO Martijn Broersma, director François Granade, and corporate entities Cerebellum Network Inc., Interdata Network Ltd., and CEF AI Inc.
The plaintiff is represented by Laith D. Mosely and Joshua C. Williams of Raines Feldman Littrell LLP. The related first lawsuit is Goopal Digital Limited et al. v. Fred Jin et al., Case No. 3:26-cv-00857, with plaintiffs represented by John K. Ly and Jennifer L. Chor of Liang Ly LLP.
Escalation and potential regulatory scrutiny
The filing of two separate federal RICO lawsuits within weeks, now totaling $157 million in claimed damages, creates a legal dynamic that extends beyond the courtroom. Multiple independent lawsuits alleging substantially similar fraudulent conduct tend to attract the attention of federal regulators, particularly when the complaints include securities fraud claims and cite connections to individuals already convicted in federal enforcement actions.
The SEC has increasingly focused on token offerings as potential unregistered securities, and the allegations in the Qu complaint, including material misrepresentations to SAFT investors, insider selling in violation of lockup agreements, and wash trading through a firm whose founder was convicted in a DOJ sting operation, fall squarely within the agency’s enforcement priorities. The DOJ’s existing familiarity with Gotbit through Operation Token Mirrors could also provide a pathway for criminal investigators to examine related token launches, including Cere Network’s.
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