fire

Nova

Berachain

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Berachain, one of crypto’s buzziest new blockchains, is facing renewed scrutiny after a report revealed that one of its major Series B backers, Brevan Howard Digital’s Nova Digital fund, was granted an unusually generous right to reclaim its $25 million investment after the project’s token launch.&nbsp;
The arrangement, outlined in documents obtained by a media outlet, allowed Nova to request a refund for up to a year following Berachain’s token generation event (TGE) on February 6, 2025.
The clause is highly unorthodox in the crypto venture world. Four crypto-focused attorneys told the outlet that post-TGE refund rights are extremely rare, and when they do appear, they typically apply only if a project fails to launch a token at all.&nbsp;
In Berachain’s case, the refund would be allowed after the token begins trading, essentially giving Nova the ability to recover its principal if BERA’s price drops. BERA has already fallen roughly 66% from Nova’s $3 purchase price, making a refund financially attractive.
If Nova exercises its right before February 6, 2026, Berachain could be required to repay $25 million in cash, potentially straining the startup’s finances. While investors face a one-year cliff on token allocations, Nova’s refund clause, detailed in a March 5, 2024, side letter, gives the fund the option to reclaim “some or all” of its investment.
The revelation has sparked debate because Brevan Howard’s involvement helped legitimize Berachain during its rapid ascent.&nbsp;
The project, which began in 2021 as a pot-smoking bear NFT meme, quickly evolved into a heavily hyped <a href="https://hash.media/hashdesk/whitebit-durrah-alfodah-partner-to-boost-saudi-blockchain/" target="_blank" rel="noopener noreferrer nofollow">blockchain</a>, raising at least $142 million at a $1.5 billion valuation from investors including Framework Ventures, Polychain, Hack VC, Arrington Capital, and Tribe Capital.
Berachain’s anonymous founder, Smokey the Bera, disputed the report, calling it “inaccurate and incomplete,” and insisted that all Series B participants invested on the same terms.&nbsp;
He added that Brevan Howard’s Nova vehicle was a “liquid-only” fund that co-led the round through Brevan’s Abu Dhabi office.
Despite the denial, questions remain about whether the refund right was disclosed to other investors and whether the arrangement complies with applicable securities and investor-protection rules.
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Berachain under fire for Nova Digital’s unusual refund clause

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