Cere Network Faces $100M Fraud Lawsuit Over Token Dump

A 99% price collapse. That's what investors in Cere Network are left with after what they claim was a massive token dump by insiders.

Investors have filed a $100 million federal lawsuit against the San Francisco-based blockchain data storage project, alleging fraud, racketeering, and a large-scale token dump following its 2021 initial coin offering. The complaint paints a picture of broken promises, misleading claims, and what plaintiffs describe as a systematic scheme to enrich insiders at investors' expense.

The Lockup That Never Was

At the heart of the lawsuit lies a fundamental breach of trust. Cere Network raised nearly $50 million through private and public token sales in November 2021, with investors told that insiders' tokens would be subject to lockups—a standard practice designed to prevent early selling and protect public buyers.

According to the lawsuit filed Tuesday, those representations were false. Plaintiffs claim founder Fred Jin, described as the "ringleader," and other insiders sold tens of millions of dollars worth of tokens immediately after launch, triggering the sharp price collapse that followed.

Lead plaintiff Lujunjin "Vivian" Liu, who served as a senior strategic adviser while also investing personally and through Goopal Digital Ltd., says she spent up to 20 hours per week from 2019 through 2021 helping with fundraising, investor introductions, and token planning. Now she and Goopal are seeking $25 million in compensatory damages and $75 million in punitive damages.

From Promise to Penny Stock

The numbers tell a devastating story. CERE tokens launched at approximately $0.45, fell to $0.06 within weeks, and were trading near $0.0012 as of Thursday—a drop of more than 99% from peak.

This wasn't supposed to happen to a project that positioned itself as a "decentralized cloud data platform" designed to enable secure data collaboration across blockchain and traditional systems. Cere pitched itself as a blockchain-native alternative to traditional cloud storage, backed by proprietary crypto assets that would be used for payments and governance on the network.

Investors were told the token would eventually be listed on major exchanges, including Binance, and that proceeds from token sales would fund the buildout of Cere's infrastructure. Instead, plaintiffs argue, proceeds were used to enrich insiders rather than build the business.

Overstated Everything

Beyond the alleged token dumping, the lawsuit claims Cere systematically overstated customer traction, technical readiness, and enterprise adoption. This included allegedly misleading or untrue claims about Fortune 1000 clients—the kind of blue-chip endorsements that can make or break a blockchain project's credibility.

The complaint suggests a pattern of deception that went far beyond typical startup optimism, alleging deliberate misrepresentations designed to inflate token prices before insiders cashed out.

The Cere Network case may become a test of how courts handle the blurred lines between failed startups and deliberate fraud in the largely unregulated world of token offerings.