Cere Network CEO Fred Jin and Lime co-founder Brad Bao face second federal lawsuit as crypto fraud claims reach $157 million

Cere Network CEO Fred Jin, described in court filings as the alleged architect of a multi-year cryptocurrency fraud, and Lime co-founder Brad Bao have been named as defendants in a second federal racketeering lawsuit, bringing total claimed damages to $157 million across two separate RICO actions in the Northern District of California.

The new complaint, filed by San Francisco investor Josef Qu (Case No. 3:26-cv-01235), seeks $57 million in damages and brings ten causes of action including RICO, securities fraud under the Securities Exchange Act, and theft. It arrives just weeks after a $100 million suit was filed by investor group Goopal Digital Limited against the same defendants.

A rapid escalation with new legal theories

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 Qu complaint significantly expands the legal arsenal, adding securities fraud under Section 10(b) and Section 20(a) of the Securities Exchange Act, theft, and breach of the implied covenant of good faith and fair dealing.

The introduction of federal securities fraud claims is significant. Section 10(b) prohibits the use of manipulative or deceptive devices in connection with the purchase or sale of securities. Section 20(a) imposes “control person” liability on individuals who direct entities that violate securities laws, creating a direct legal pathway to hold board members like Bao accountable regardless of whether they personally executed the alleged scheme.

The complaint alleges that Cere Network CEO Fred Jin and his associates made material misrepresentations to investors about how funds would be used, the lockup restrictions on insider tokens, and the financial health of the project.

Blockchain evidence and $16.6 million in DeFi losses

The new complaint goes further than the first lawsuit in its evidentiary specificity. The filing cites specific Etherscan transaction records purporting to show the movement of tokens and funds from Cere Network corporate wallets, providing a forensic-grade paper trail on a public, immutable ledger.

The complaint provides a detailed accounting of approximately $16.6 million that was allegedly lost in 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 characterizes these as unauthorized and reckless.

Both lawsuits allege that additional proceeds from the insider sell-off, totaling approximately $41.78 million, were routed through a network of shell companies in Delaware, the British Virgin Islands, Panama, and Germany, and into personal accounts controlled by Jin, his wife Maren Schwarzer, and his brother Xin Jin. The new filing adds that funds were also used to purchase luxury real estate in Germany and Florida.

Gotbit connection draws further DOJ parallels

As detailed in the first lawsuit, both complaints allege that Jin engaged Gotbit Ltd. to deploy automated trading bots that conducted wash trading during the November 2021 token launch, generating fake volume to create the appearance of legitimate market activity while insiders systematically liquidated their positions.

Gotbit’s founder, Aleksei Andryunin, was convicted of wire fraud and market manipulation as part of the DOJ’s Operation Token Mirrors , the same federal sting operation that targeted crypto market-making firms engaged in wash trading. The DOJ has called wash trading“a cornerstone of crypto market manipulation” and has aggressively pursued firms engaged in the practice.

The Qu complaint adds new blockchain detail to this allegation, citing Etherscan evidence showing token movements from corporate wallets to exchange wallets on the first day of trading. The combination of a convicted market maker and on-chain transaction records documenting coordinated token movements strengthens the evidentiary foundation for both civil cases.

Investors who never received a single token

Plaintiff Josef Qu invested in Cere Network through a Simple Agreement for Future Tokens in 2019, which 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, even as insiders allegedly moved their own allocations to exchanges and began selling within hours of the launch.

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. The CERE token reached $0.47 on launch day and now trades at approximately $0.00061, a decline of more than 99.8 percent.

A pattern of ventures: Funler, Bitlearn, Cere, and now CEF AI

The Qu complaint expands on allegations of a repeating pattern. 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 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 injunctive relief to freeze the company’s holdings. If the allegations are substantiated, the implication is that the alleged fraud has not ended. It has merely changed industries.

Fred Jin’s alleged role as architect of the scheme

Both lawsuits identify Jin as the lead defendant and alleged mastermind. The complaints allege Jin personally directed the insider token sell-off on launch day, engaged Gotbit to conduct wash trading, controlled the corporate wallets from which $16.6 million was lost in DeFi investments, and routed proceeds through shell companies in four jurisdictions into accounts held by himself, his wife Maren Schwarzer, and his brother Xin Jin.

The new complaint paints Jin as a serial operator, alleging he ran at least two prior ventures, Funler and Bitlearn, that followed the same playbook before Cere Network, and that he has now launched a new AI venture, CEF AI Inc., with funds allegedly stolen from Cere investors. The plaintiff is seeking to freeze Jin’s cryptocurrency wallets, bank accounts, CEF AI holdings, and luxury real estate in Germany and Florida.

Brad Bao’s alleged role and prior litigation

Bao, who gained prominence as co-founder of the $2.4 billion scooter startup Lime, allegedly served as a board member who lent credibility to the Cere Network project while receiving director’s fees and an early token allocation. Both lawsuits allege he approved transactions that moved funds into accounts controlled by Jin and failed to flag irregularities.

The new complaint adds Section 20(a) “control person” liability, which creates a legal pathway to hold Bao responsible as someone who exercised control over an entity that violated federal securities laws.

Bao and his companies have been involved in prior litigation, including a fraud action involving the City of San Francisco and a lawsuit by venture fund Khosla Ventures alleging fraud and intentional interference over a collapsed $30 million acquisition deal.

Potential regulatory exposure

Two federal RICO lawsuits totaling $157 million, filed within weeks of each other and now including securities fraud claims, create the kind of fact pattern that has historically drawn regulatory scrutiny from federal authorities. The DOJ and SEC have demonstrated a willingness to pursue enforcement actions following escalating civil litigation, particularly in cases involving:

• Securities fraud (tokens sold to U.S. investors under Reg D, with misrepresentations alleged in SAFT agreements)

• Wire fraud (the complaints cite multiple instances of allegedly fraudulent communications to investors)

• Money laundering (both complaints trace funds through shell companies in four jurisdictions and into luxury real estate)

• Market manipulation (the alleged Gotbit arrangement, whose founder was convicted in Operation Token Mirrors)

• Ongoing conduct (the allegation that stolen funds are actively being deployed into a new AI venture)

The SEC has made token offerings a priority enforcement area, 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 convicted firm, fall squarely within the agency’s mandate. The DOJ’s existing investigative thread through the Gotbit prosecution provides an established pathway for criminal investigators to examine related token launches.

The U.S. Attorney’s Office for the Northern District of California and the DOJ’s Criminal Division maintain active crypto enforcement units that regularly coordinate with civil plaintiffs’ attorneys and SEC investigators. The cascading nature of the Cere Network litigation, with multiple independent plaintiffs, expanding legal theories, and growing forensic evidence, is the type of pattern that has preceded federal action in prior cases.

Other defendants

In addition to Jin and Bao, both lawsuits name Maren Schwarzer (Jin’s wife), Xin Jin (Jin’s brother), Martijn Broersma (CMO), François Granade (board member), and corporate entities Cerebellum Network Inc., Interdata Network Ltd., and CEF AI Inc.

The new lawsuit is Josef Qu v. Fred Jin et al., Case No. 3:26-cv-01235, with the plaintiff 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.

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