Key Takeaways
The 41-page complaint, lodged in the U.S. District Court for the Northern District of California (Case No. 3:26-cv-00857), accuses Bao and several co-defendants of participating in what plaintiffs describe as a large-scale pump-and-dump scheme tied to the Cere Network token.
At the center of the lawsuit is Cere Network CEO Fred Jin, who is accused of raising roughly $43 million from more than 5,000 investors ahead of the token’s November 2021 launch. According to the filing, insiders allegedly generated $41.78 million by aggressively selling tokens immediately after launch, despite earlier promises of lock-ups.
The complaint claims the token initially surged to around $0.47 before collapsing to approximately $0.0012 by early 2026 – a decline of more than 99 percent. Investors argue that the rapid sell-off effectively wiped out retail participants while benefiting insiders.
The lawsuit also alleges that market-making firm Gotbit Ltd. was used to conduct wash trading in order to conceal the scale of insider dumping. In addition, plaintiffs claim that $16.6 million was siphoned from company wallets and diverted into speculative DeFi investments.
As a board member and investor in Cere Network, Bao is accused of lending credibility to the project through his professional reputation. The complaint further alleges that he approved transactions that enabled funds to be transferred to personal accounts, while failing to address significant accounting red flags.
Plaintiffs – investor Vivian Liu and Goopal Digital Ltd. – are seeking $100 million in compensatory and punitive damages under federal racketeering statutes.
Bao has not been convicted of any wrongdoing, and the allegations remain unproven in court.
The case arrives amid intensifying federal scrutiny of digital asset projects. According to data from Chainalysis, crypto-related scams reached record levels in 2025, with total estimated losses ranging between $17 billion and $30 billion.
Impersonation scams reportedly surged by 1,400 percent year-over-year, while AI-enabled fraud became significantly more profitable. The average scam payment rose sharply, and major cybercrime groups – including the North Korean-linked Lazarus Group – were tied to historic thefts, including the $1.5 billion hack of Bybit in February 2025.
Federal prosecutors have increasingly relied on racketeering and major fraud statutes to pursue crypto executives and projects.
In early 2026, Braden John Karony, former CEO of SafeMoon, was sentenced to 100 months in prison after being convicted of conspiracy to commit securities fraud, wire fraud, and money laundering. He was also ordered to forfeit $7.5 million.
Separately, multiple defendants in a RICO conspiracy involving more than $263 million in alleged crypto thefts have entered guilty pleas following a federal indictment unsealed in 2025. The collapse of FTX also continues to reverberate through the industry, with creditor repayments beginning in early 2025 under a court-approved restructuring plan.
Another lawsuit filed in the Southern District of New York targeted the Meteora (M3M3) token project, alleging insiders controlled 95 percent of the supply in a scheme that allegedly led to more than $69 million in investor losses.
The Brad Bao case underscores how federal authorities and private litigants are increasingly turning to RICO statutes to pursue alleged misconduct in the digital asset sector. If the court allows the case to proceed, it could set another major precedent for executive liability in crypto token launches.
For now, the allegations remain claims awaiting judicial review – but the reputational and legal stakes are already significant.
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