The co-founder and board of crypto infrastructure platform Cere Network have been hit with a $100 million lawsuit claiming they undertook a pump-and-dump scheme that stole millions of dollars from investors.
In a lawsuit filed in a San Francisco federal court on Tuesday, Vivian Liu, who said she worked for and invested in the company, claimed Cere co-founder Fred Jin, his brother, his wife, and the company’s board stole $41 million from investors.
According to the lawsuit, Jin promised ahead of a public token launch for the platform in November 2021 that he and early Cere investors could not sell their tokens and that they would be unlocked months later.
“While certain employees and investors had their Cere Tokens ‘locked’ under the vesting schedule, Jin and his accomplices secretly sold over $41 million in Cere Tokens on various crypto exchanges and transferred these funds into their personal wallets immediately after the tokens went ‘live,’” the complaint alleged.
A highlighted excerpt of Vivian Liu’s complaint accusing Cere co-founder Fred Jin of fraud. Source: PACER
The complaint is the second lawsuit against Cere Network this month, after Cere co-founder Kenzi Wang sued Jin and the board on behalf of the company in Delaware on Jan. 13, similarly alleging fraud.
Cointelegraph contacted Cere Network and Jin for comment.
Latest complaint seeks $100 million in damages
Liu’s lawsuit accused Jin of stealing investor funds “originally slated for Cere Network’s operations” and moving the money into shell companies and accounts he and his alleged accomplices controlled while gambling millions of dollars in “risky crypto trades.”
She also claimed that Jin worked with Gotbit, a market maker convicted of fraud and market manipulation in June, to use “sophisticated internet ‘bots’” that boosted the token’s trading volumes “to conceal the fraud.”
Liu argued to the court that she was entitled to $100 million in damages, “commensurate with the sheer scale and size of the fraud.”
Cere co-founder Kenzi wang claims $58 million misappropriated
Earlier in January, Cere co-founder Wang accused Jin in Delaware’s Court of Chancery of a scheme to “systematically misappropriate over $58 million” of the company’s corporate assets.
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Wang claimed Jin concealed the scheme “through fraudulent accounting, sham entities, and cryptocurrency ‘wash trading’” and accused Jin of causing “approximately $41.78 million worth of Cere Tokens” to be transferred from the company’s treasury to personal accounts on crypto exchanges HTX and Kucoin.
He also accused Jin of giving “grossly falsified financial statements to shareholders and advisors” and understating fundraising amounts by over $21 million.
The Cere Network (CERE) token is currently trading for a fraction of a cent, down 99.9% from its peak of 47 cents in November 2021, according to CoinGecko.
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