Brad Bao, executive chairman and co-founder of electric scooter company Lime, has been named as a defendant in a second federal racketeering lawsuit alleging he participated in a cryptocurrency fraud scheme, bringing total claimed damages against him and his associates to $157 million. The case represents a significant escalation of what was already one of the highest-profile RICO actions to hit the crypto sector, drawing a direct line between a sitting chairman of a major tech company and what plaintiffs describe as a sprawling, multi-year fraud.
The complaint was filed in the U.S. District Court for the Northern District of California by San Francisco investor Josef Qu (Case No. 3:26-cv-01235), who is seeking $57 million in damages. It arrives just weeks after a separate $100 million racketeering suit filed by investor group Goopal Digital Limited (Case No. 3:26-cv-00857) against the same defendants. Both lawsuits name Bao alongside lead defendant Fred Jin, the CEO of blockchain venture Cere Network.
What Are the Lawsuits About?
Both lawsuits center on Cere Network, a blockchain platform that raised approximately $42.96 million from over 5,000 retail investors, many of whom purchased tokens through the Republic platform. The complaints allege a coordinated pump-and-dump scheme in which insiders secretly sold approximately $41.78 million in tokens while telling investors their holdings were locked under vesting schedules.
The CERE token reached an all-time high of $0.47 on its November 2021 launch day before collapsing. It now trades at approximately $0.00061, a decline of more than 99.8 percent. Both plaintiffs allege they never received tokens they were contractually owed, even as insiders moved their own allocations to exchanges within hours of launch.
The new Qu complaint significantly expands the legal theories from the first suit, adding federal securities fraud claims 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, bringing the total to ten causes of action across the two filings.
Who Is Fred Jin and What Is He Accused Of?
The complaints identify Jin as the central figure behind the alleged fraud. As CEO and co-founder of Cere Network, Jin allegedly controlled the treasury wallets, directed an arrangement with market-making firm Gotbit Ltd. to conduct wash trading on launch day, authorized high-risk DeFi investments that lost $16.6 million of investor capital, and personally oversaw the movement of funds into accounts held by himself, his wife Maren Schwarzer, and his brother Xin Jin. The filing describes Jin as having final authority over all major financial decisions from the company's inception through the alleged scheme.
Jin also allegedly controlled the token distribution process and withheld investor allocations. Plaintiff Qu invested in Cere Network through a Simple Agreement for Future Tokens in 2019, entitling him to 27,777,778 CERE tokens. He never received any of them, the complaint states, even as Jin and other insiders moved their own tokens to exchanges within hours of the November 2021 launch.
The complaint further details what it describes as a pattern of prior failed ventures by Jin: a project called Funler (2016–2018) that allegedly lost investors 95 percent of their money, and a subsequent venture called Bitlearn (2018) that allegedly followed the same trajectory. The filing alleges Jin has since launched a new AI company, CEF AI Inc., funded with proceeds from the alleged Cere Network fraud. The plaintiff is seeking to freeze CEF AI's assets, Jin's cryptocurrency wallets, bank accounts, and luxury real estate in Germany and Florida.
What Is Bao Specifically Accused Of?
Bao co-founded Lime in 2017, building it into one of the most recognizable micro-mobility companies in the world, operating in more than 280 cities. He currently serves as the company's executive chairman. His involvement with Cere Network came through a position on the company's board of directors. Both lawsuits allege he received director's fees and early token allocations, lent his name and mainstream credibility to attract investors, and approved financial transactions that moved funds into accounts controlled by Jin.
The new complaint adds Section 20(a) "control person" liability, which creates a direct legal pathway to hold Bao accountable as someone who exercised control over an entity alleged to have violated federal securities laws. This is a more aggressive legal theory than anything in the first suit and does not require proof that Bao personally executed the alleged scheme.
Bao has a history of litigation predating the Cere Network case. He has previously faced a fraud action involving the City of San Francisco and a separate lawsuit brought by venture firm Khosla Ventures alleging fraud and intentional interference in connection with a collapsed $30 million acquisition deal. The accumulation of legal exposure across multiple fronts, now including two federal RICO suits with a combined $157 million in claimed damages, represents a significant escalation for a figure whose public reputation was built on transforming urban transportation.
The Gotbit Connection
Both complaints allege Jin and his associates engaged Gotbit Ltd. to deploy automated trading bots that conducted wash trading, generating fake volume to mask the insider sell-off. Gotbit's founder, Aleksei Andryunin, was subsequently convicted of wire fraud and market manipulation as part of the DOJ's Operation Token Mirrors, a federal sting operation targeting crypto market manipulation. The Qu complaint adds new blockchain detail, citing Etherscan evidence showing token movements from corporate wallets to exchange wallets on the first day of trading.
Where Did the Money Go?
Both lawsuits allege proceeds were routed through a network of shell companies and personal accounts controlled by Jin, Schwarzer, and Xin Jin across multiple jurisdictions including Delaware, the British Virgin Islands, Panama, and Germany. The total alleged insider sell-off amounts to approximately $41.78 million.
The new complaint adds a detailed accounting of $16.6 million lost in unauthorized DeFi 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 alleges Jin directed these investments without investor consent or disclosure. The filing also alleges funds were used to purchase luxury real estate in Germany and Florida.
Key Allegations at a Glance
- Insider token dumping: Approximately $41.78 million in tokens allegedly sold by insiders despite public promises of lockup provisions.
- Securities fraud: New Section 10(b) and Section 20(a) claims under the Securities Exchange Act, absent from the first lawsuit.
- Wash trading via Gotbit: Automated bots allegedly used to generate fake trading volume, with Gotbit's founder since convicted in a federal sting.
- $16.6 million in DeFi losses: Investor capital allegedly placed in unauthorized high-risk DeFi positions including Mochi Protocol, CVX/ETH, Maple Finance, and Neutrino USDN.
- Shell company network: Proceeds allegedly routed through entities in Delaware, the BVI, Panama, and Germany into personal accounts.
- Unpaid investor tokens: Both plaintiffs allege they never received tokens owed to them despite confirmed entitlements.
- Serial ventures: Jin's alleged pattern includes Funler (2016), Bitlearn (2018), Cere Network (2019), and now CEF AI Inc.
- Asset freeze request: Plaintiff seeks to freeze cryptocurrency wallets, bank accounts, and luxury real estate in Germany and Florida.
Named Defendants and What Comes Next
Both lawsuits name Fred Jin, Brad Bao, Maren Schwarzer, Xin Jin, Cere CMO Martijn Broersma, director François Granade, and corporate entities Cerebellum Network Inc., Interdata Network Ltd., and CEF AI Inc.
Escalation and Potential Regulatory Scrutiny
The filing of two separate federal RICO lawsuits within weeks, now totaling $157 million in claimed damages, creates a legal dynamic that extends beyond the courtroom. Multiple independent lawsuits alleging substantially similar fraudulent conduct tend to attract the attention of federal regulators, particularly when the complaints include securities fraud claims and cite connections to individuals already convicted in federal enforcement actions.
The SEC has increasingly focused on token offerings as potential unregistered securities, 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 firm whose founder was convicted in a DOJ sting operation, fall squarely within the agency's enforcement priorities. The DOJ's existing familiarity with Gotbit through Operation Token Mirrors could also provide a pathway for criminal investigators to examine related token launches, including Cere Network's.
For investors and market participants, the cascading nature of the lawsuits sends a clear signal: the legal pressure on the Cere Network insiders is intensifying, not winding down.
