A $100 million fraud and racketeering lawsuit has been filed in federal court against Cere Network's co-founder, Fred Jin, its board members, and associated companies. The lawsuit was filed on Tuesday in California. The plaintiffs allege that they were enticed to invest and work for Cere Network under false pretenses. They claim that insiders profited by secretly cashing out their tokens while others were locked out.

Cere Network, a San Francisco-based cloud data storage venture, is described as a decentralized data cloud platform that uses blockchain technology to ensure secure data collaboration and interoperability across blockchain and traditional systems.

According to the complaint, Fred Jin, previously associated with Funler and Bitlearn, pitched Lujunjin "Vivian" Liu, an investor from Cupertino, on his idea to create a decentralized data storage system using blockchain technology. This system would use a network of independent servers to serve the growing demand for secure cloud-based data storage. Cere Network would use blockchain to store customer data by using electronic ledgers maintained on multiple computers to ensure transaction security and verification. A "native" crypto token, Cere Token, would be created to pay for transactions and provide governance for token holders.

Liu alleges that Jin told her the Cere Token would be listed on Binance exchange and that he intended to raise funds from private investors to fund Cere's operations through token sales, eventually conducting an initial coin offering (ICO).

Liu claims she worked an average of 10-20 hours weekly from 2019 through 2021, introducing Jin to investors and preparing materials for the ICO. Liu and Goopal Digital Ltd., an investment group she was affiliated with, invested in Cere Tokens. The ICO occurred in November 2021, raising nearly $50 million through private and public sales.

The complaint states that it was represented that Jin and other insiders' tokens would be locked up to prevent them from dumping their tokens and crashing the value, a common practice in ICOs. However, Liu alleges that these representations were false and that Jin and other insiders sold tens of millions of dollars worth of tokens immediately after the ICO. The price of Cere Token reportedly fell from $0.45 per token at launch to $0.06 by December 2021. As of Tuesday, the token was valued at $0.0012, which is 99.7% below its peak value.

The complaint also alleges that many of Jin's statements to Liu and other investors regarding the cloud storage business were false and misleading. These include misrepresentations about the adoption rate of Cere Network by Fortune 1000 clients, the technical readiness of the cloud storage network, and the timing of the launch of cloud services. Liu alleges that Jin and the other defendants used the proceeds from the Cere Token sales to enrich themselves.

John Ly, the plaintiffs' attorney, stated that the lawsuit is significant because "people rely on promises made by tech founders, and, in doing so, they invest enormous amounts of their time and their money into start-ups". He added, "When those promises turn out to be false, as alleged in the complaint, both the plaintiffs and the public suffer the consequences".

As of now, no lawyer has entered an appearance for Jin and the other defendants in the case.