Berachain Pushes Back on Claims Over $25M Refund Deal With Brevan Howard

Legal papers that Brevan Howard’s Nova Digital fund has the right to ask for a refund of its $25 million Series B investment in Berachain. This right can be used within a year of the project’s token launch in February 2025. 

But Nova Digital can only use this privilege if it puts $5 million into a Berachain wallet within 30 days of the . Neither party has confirmed that this happened. According to the agreement, the reimbursement clause would end if this deposit were not made or were later returned.​

The Market and Legal Context

It is very rare for a crypto enterprise to have a post- refund right. Lawyers say these kinds of deals are rare and usually occur only when someone doesn’t do what they promised, as when a token doesn’t launch. In this situation, the condition allows Brevan Howard to request a full refund within a year. 

This might compel to find $25 million in cash while also losing Nova Digital’s locked token allotment.​ It has been reported that other Series B investors were not informed about this side deal, raising questions about openness.

Nova Digital’s $25 million investment was about a fifth of Berachain’s $100 million Series B round, which valued the blockchain network at $1.5 billion.​

Berachain’s Answer

Berachain’s leaders, including an unnamed founder known as Smokey The Bera, have about the topic directly. They admit there is a side letter granting conditional reimbursement, but say the clause is not a privilege or a secret arrangement. 

Berachain, on the other hand, says that it was a consensual arrangement based on the fund’s need for liquidity and the usual rules for large institutional investors. The team says that Brevan Howard was involved on the identical basic terms as other Series B investors and firmly disputes that got any special treatment.​

Concerns About Uncertainty and Transparency

It’s not clear whether the refund right is still valid, as neither Berachain nor Brevan Howard has said whether the $5 million activation deposit was made.

The scandal has sparked a discussion in the crypto investment world about how common and ethical “risk-free” terms are for large venture funds, especially when they aren’t made clear to other stakeholders.​ Berachain says that everyone acted in accordance with the law.

But this circumstance shows that there is a growing demand for openness in private as the industry grows.