Report: Berachain gave Brevan Howard an exclusive $25m refund right

Report: Brevan Howard’s Nova got a one‑year $25m refund right on Berachain’s BERA launch.

The blockchain project Berachain included in its agreement with Nova Digital — a Brevan Howard unit — an exclusive provision granting a $25 million refund of its investment within a year of the BERA token launch, Unchained reported. 

Such terms depart from classic venture funding. The arrangement effectively insulated the firm’s capital from risk: if the coin rises, Nova Digital profits; if it falls, the fund can simply recover its money. 

Lawyers agreed that a post-launch refund right is rare. Two experts said such clauses usually apply only in one case: when a project fails to issue a token on time.

“The only reasonable reason a company might agree to such an arrangement with a lead investor is the ability to use the name of a well-known fund to attract the rest of the round. When other investors see that a reputable organisation is leading the deal, it increases their trust and willingness to invest,” commented MetaLeX Labs co-founder Gabriel Shapiro.

The only known precedent for such a refund right in tokens was the Flying Tulip project, launched by a co-founder of Sonic (formerly Fantom) and DeFi developer Andre Cronje. During a $200 million funding round, all investors without exception were offered the option to redeem their investment. 

Two anonymous Berachain investors confirmed they were not told about special terms for Brevan Howard.

Should Nova Digital exercise the right (which would be logical — the BERA price has plunged 66% from the agreed $3 level), Berachain would have to find cash for the refund. According to the project’s terms, investor tokens are locked for one year.

Rebuttal 

The Berachain founder who goes by Smokey The Bera denied Unchained’s report, calling journalist Jack Kubinec’s investigation “commissioned,” “incomplete” and “inaccurate.” 

Bm Folks,

I wanted to put something out here to set the story straight in light of the recent hit piece. I also didn’t want to write a knee-jerk response without getting feedback from our legal team (given allegations made) and some of our largest stakeholders who have been…

— Smokey The Bera 🐻⛓ (@SmokeyTheBera) November 25, 2025

“I understand that in a market downturn everyone craves drama, but this article was clearly created with the involvement of bad-faith people — in particular, some disgruntled former employees,” he wrote. 

According to Smokey The Bera, the Berachain team entered into several commercial agreements with Brevan. The refund clause was initiated by the fund itself as a protective measure in case the project could not launch the token or secure exchange listings. 

In such a scenario, the locked coins would not fit the organisation’s investment strategy, which focuses on liquid assets. 

“We signed an additional agreement requiring Nova to provide liquidity on the network after its launch. This is standard practice, not a way to attract an investor or to insure against a price drop after listing,” the Berachain founder explained.

He also stressed that Nova is the largest holder of BERA, combining locked Series B tokens with open-market purchases.

Community reaction 

Replies to Smokey The Bera’s rebuttal were split. Some users questioned the truthfulness of the Berachain founder’s wording. 

You didn’t address the central claim of the article

Does Nova have a refund right?

— Scott Phillips (@ScottPh77711570) November 25, 2025

“You still did not answer the main question raised in the article. Does Nova have a right to a refund?”

Another community member noted that “wordiness only confirms the presence of hidden problems”:

“Experience shows: the more transparent the situation, the shorter and clearer the explanations.” 

Kubinec also responded to the rebuttal, saying that before publishing the investigation he sent a list of questions to the PR team but received no clear answers. 

Bm Smokey. Couple clarifications:
— I sent your PR a list of questions on Oct. 21 outlining what I planned to report. You refused to answer those questions and sent the statement that appeared in the article. When I asked for clarification or actual answers to any of my questions…

— Jack Kubinec (@whosknave) November 25, 2025

“I do not see any factual refutations of the facts set out in the article. And since I have you here, let me ask directly: did you inform other Series B investors that Nova Digital has a right to a refund?”

In March, the Berachain team launched a proof-of-liquidity (PoL) system as the first phase of a transition to on-chain governance.