Investors have filed a $100 million lawsuit in U.S. federal court against individuals and entities tied to Cere Network, a San Francisco-based blockchain data storage project. The complaint alleges fraud, racketeering, and a large-scale token dump following its 2021 initial coin offering (ICO).
The lawsuit, filed on Tuesday, names Fred Jin, described as Cere’s founder and “ringleader,” along with other defendants. Plaintiffs accuse them of misleading investors about the project’s business prospects, token lockups, and customer adoption. Cere Network positions itself as a decentralized cloud data platform for secure data collaboration.
According to the filing, Jin pitched Cere as a blockchain-native alternative to traditional cloud storage, backed by its proprietary Cere Token (CERE) for payments and governance. Investors were told the token would be listed on major exchanges like Binance and that proceeds from sales would fund infrastructure development.
One plaintiff, Lujunjin “Vivian” Liu, served as a senior strategic advisor and was compensated in CERE tokens while also investing personally and through Goopal Digital Ltd. From 2019 through 2021, Liu spent up to 20 hours weekly assisting with fundraising and token planning ahead of the public sale.
Cere raised nearly $50 million through private and public token sales in November 2021. Investors were assured that insider tokens would be subject to lockups to prevent early selling. The complaint alleges these representations were false, claiming Jin and other insiders sold tens of millions of dollars worth of tokens immediately after launch, triggering a sharp price collapse.
Liu and Goopal are seeking $25 million in compensatory damages and $75 million in punitive damages, citing the scale of the alleged fraud. CERE’s price fell from about $0.45 at launch to $0.06 within weeks and was trading near $0.0012 as of last Thursday—a drop of more than 99% from its peak.
The lawsuit also alleges Cere overstated customer traction, technical readiness, and enterprise adoption, including claims about Fortune 1000 clients that plaintiffs say were misleading. Plaintiffs argue proceeds from token sales were used to enrich insiders rather than build the business.
This legal action arrives amid increased regulatory scrutiny in the U.S., with the Securities and Exchange Commission (SEC) intensifying enforcement against unregistered securities offerings. Legal experts note the case hinges on the “Howey Test,” examining if the token sale constituted an investment contract. The outcome could set a precedent for greater transparency and accountability in token-based fundraising, potentially compelling other projects to adopt more conservative disclosure practices and rigorous legal vetting.
