On January 29, a decentralized data cloud platform became the subject of renewed legal scrutiny. According to a complaint filed in the U.S. District Court for the Northern District of California, co-founder Fred Jin, along with family members and board participants, is accused of orchestrating a “pump-and-dump” scheme during the project’s 2021 token offering. The lawsuit seeks damages of up to USD 100 million, alleging significant losses suffered by investors.
The complaint claims that the alleged actions occurred shortly after the token was listed, directly impacting market pricing and investor confidence.
Dual Role of Employee and Investor Raises Disclosure Issues
The plaintiff, who identifies as both a former employee and an investor, states that project leadership had promised that tokens held by founders and early stakeholders would remain locked for several months post-listing. However, the lawsuit alleges that shortly after trading began, insiders secretly sold tokens across multiple exchanges, liquidating more than USD 41 million worth of assets and transferring the proceeds to personal wallets.
At the core of the dispute is the discrepancy between public lock-up commitments and actual on-chain token movements.
Internal Governance Disputes and Asset Misappropriation Claims
This marks the second lawsuit involving the project in January. Earlier, another co-founder filed suit in Delaware on behalf of the company, alleging that Fred Jin and board members systematically misappropriated over USD 58 million in corporate assets. The filing references the use of misleading accounting practices, shell entities, and wash trading to conceal fund movements.
Together, the lawsuits point to deeper governance and transparency issues within the organization.
On-Chain Trading Behavior and Market Manipulation Allegations
The latest complaint further alleges coordination with a market maker previously convicted of market manipulation, claiming that automated trading bots were used to inflate trading volume and obscure large-scale token sell-offs. The project’s token price has since fallen approximately 99.9% from its November 2021 peak. Neither the project nor the individuals named have publicly responded to the allegations.
Cases of this nature underscore how on-chain transaction data, address relationships, and liquidity movements often become central evidence in post-event investigations.
From Post-Event Litigation to Proactive Risk Identification
From an industry perspective, the recurring emergence of such disputes highlights the need for earlier visibility into token distribution, lock-up enforcement, and abnormal fund movements. Systematic monitoring of transaction behavior and address correlations can help surface risks before they escalate into legal action. In this context, compliance-focused analytics frameworks such as Trustformer KYT provide a structured way to observe transaction patterns and fund flows, supporting a more proactive approach to risk awareness and governance in digital asset ecosystems.