Federal RICO suits tied to Gotbit’s wash‑trading ring have reached Silicon Valley: Lime executive chairman Brad Bao is now named in two civil racketeering complaints seeking a combined $157 million over alleged fraud at Cere Network.
What the suits say
- Two separate RICO complaints were filed in the Northern District of California — a $100 million suit by Hong Kong‑linked investor group Goopal Digital Limited and a $57 million suit by San Francisco investor Josef Qu. Both name Cere CEO Fred Jin, Bao and other insiders.
- Plaintiffs allege Cere raised roughly $42.96 million from more than 5,000 investors (many via Republic under Regulation D). On Cere’s CERE token launch day in November 2021, the complaints claim market‑maker Gotbit executed wash trades to manufacture volume and conceal a large insider sell‑off. Insiders allegedly dumped about $41.78 million worth of CERE while publicly claiming holdings were locked by vesting schedules.
- CERE’s market price briefly neared $0.47 in early November 2021 and has since plunged to roughly $0.00061 — a fall of more than 99.8%. Josef Qu says he signed a 2019 SAFT entitling him to 27,777,778 CERE tokens but never received an allocation while insiders moved tokens to exchanges “within hours” of launch.
Bao’s alleged role
- The complaints paint Bao — who co‑founded scooter company Lime and served as a high‑profile Silicon Valley chair — as lending credibility to Cere. They say he received director fees and an early CERE allocation, approved transfers into accounts controlled by Jin, and used his reputation to help the team raise capital.
- Qu’s filing also asserts “control person” claims under Section 20(a) of the Securities Exchange Act, seeking to hold Bao liable for exercising authority over an entity alleged to have violated securities laws.
Treasury losses and broader allegations
- Plaintiffs say about $16.6 million in Cere treasury funds were lost in risky DeFi placements without investor consent, including roughly $6.51 million on Mochi Protocol, $3.27 million in a CVX/ETH liquidity pool, $780,000 on Maple Finance and $345,000 tied to the failed Neutrino USDN system.
- The filings depict Jin as a serial founder who allegedly raised funds “under false pretenses” through earlier ventures (Funler in 2016, Bitlearn in 2018) before Cere (2019). They further allege Jin started a new AI firm, CEF AI Inc., potentially funded with proceeds from the Cere scheme; plaintiffs have requested asset freezes on corporate accounts, personal wallets and real estate in Germany and Florida.
How this ties to Gotbit prosecutions and enforcement risk
- The civil complaints build on criminal enforcement already centered on Gotbit Ltd., whose founder Aleksei Andryunin pleaded guilty to a wire‑fraud conspiracy, served eight months in prison and forfeited $23 million in cryptocurrency after admitting to faking trading volume to pump token prices. That case involved arrests, extraditions and the shutdown of Gotbit operations.
- Regulators are watching token offerings more closely: the SEC has treated many tokens as potential unregistered securities, and the DOJ is investigating market‑manipulation paths like wash trading. A token collapse of over 99.8% that is the subject of overlapping civil and criminal narratives is likely to remain a priority for enforcement and civil plaintiffs.
What to watch next
- The outcome of the RICO suits and any court orders freezing assets linked to Jin, Bao or Cere; further civil or criminal actions tied to Gotbit’s wash‑trading network; and whether regulators use these cases to press broader claims against token issuers, market makers and executives who lend their names to projects.
This matter underscores how alleged wash trading and undisclosed insider exits can leave token holders devastated — and how high‑profile endorsements or board seats can draw outsized legal and reputational risk in the evolving crypto enforcement landscape.
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