Key Takeaways
- • Unchained reported that Berachain granted Brevan Howard Digital's Nova Digital fund a refund right on its $25 million Series B investment, exercisable for up to one year after the February 6, 2025 token generation event (TGE), a term the project did not disclose to other investors according to two Series B investors.
- • The Nova fund bought BERA at $3 per token, and BERA traded near an all-time low of $1.02 at the time of reporting, roughly a third of the purchase price, which makes the refund right economically significant for Berachain.
- • Four crypto-focused lawyers described the post-TGE refund right as highly unusual; attorney Gabriel Shapiro said he had never encountered one in any round he had worked on, which he estimated at more than 50 token deals.
- • Nova Digital must deposit $5 million into Berachain within 30 days of TGE to exercise the refund and has until February 6, 2026 to do so; Unchained could not verify whether the deposit was made or the refund exercised.
- • Berachain disputed the reporting, with co-founder Smokey the Bera stating the side letter was required by Nova's compliance team and tied to additional commercial arrangements, while Framework Ventures, the Series B co-lead, was reportedly down more than $50.8 million on its holdings.
Summary
According to a report by Unchained, Berachain granted Nova Digital, a fund within Brevan Howard Digital (the crypto arm of the $34 billion hedge fund Brevan Howard), a refund right on its $25 million Series B investment for up to a year after the project's token generation event on February 6, 2025. The side letter containing the provision, titled "Nova Side Letter" and dated March 5, 2024, was attached to Brevan Howard Digital's term sheet. Unchained reported that the refund right means the fund's principal was not at risk: if BERA performed well, the fund would benefit, and if it did not, the fund could request its money back. Nova bought BERA at $3 per token as part of the Series B, which was co-led by Framework Ventures and Nova Digital at a reported $1.5 billion valuation. Other Series B investors included Polychain, Hack VC, Arrington Capital, and Tribe Capital.
Four crypto-focused lawyers told Unchained that post-TGE refund rights are highly unusual and are typically triggered only if a project fails to launch a token. MetaLeX Labs co-founder Gabriel Shapiro said he had never heard of a post-TGE refund right being granted in any round. By comparison, Unchained noted that Flying Tulip, a project unveiled by Andre Cronje, granted all investors a refund right in its $200 million round, and that this term was publicly advertised. Unchained reported that the Berachain clause was not disclosed to other investors. Two attorneys familiar with capital markets regulation said it was an open question whether Berachain had a legal obligation to disclose the term under SEC Regulation D anti-fraud requirements, which require disclosure of "material information" without defining that term. Unchained also reported that at least one other Berachain investor held a most-favored-nation clause that could be triggered by the refund right, though attorneys said the outcome would depend on the specific terms.
Berachain's anonymous co-founder Smokey the Bera said in a statement that Unchained's reporting was "both inaccurate and incomplete," that Brevan Howard remains one of the largest investors, and that it participated in the Series B "on the same paperwork as all investors." In a post on X, Smokey said Nova's compliance team required the side letter to cover a scenario in which Berachain failed to launch and list, and that Nova committed to additional commercial arrangements, including providing liquidity on the network. The project did not respond to follow-up questions, including why the clause ran for a year after launch. Brevan Howard Digital and Nova co-founder Ashwin Ramachandran declined to comment, and Kevin Hu, who reportedly headed Nova and personally invested in Berachain's seed round, did not respond. Nova is reportedly being spun out from Brevan Howard over differences in risk tolerance and strategy, and Brevan Howard Digital remained listed as a backer on Berachain's website at publication.
BERA's decline has affected Berachain's investors. Unchained reported that Framework Ventures held 21,145,476 BERA at the end of Q2 2025, acquired at a total cost of about $72.4 million, an average of $3.42 per token, and that the position was down more than $50.8 million at then-current prices. Framework did not respond to requests for comment. BERA traded at $1.02 near an all-time low, with fully diluted valuation of roughly $526.7 million at press time, and Artemis data cited by Unchained showed roughly $367 million in net outflows from Berachain to other blockchains in 2025 as of the prior Friday. Unchained also reported that technical co-founder Dev Bear has left the project, per two sources, and that validators halted the network on November 3 after a code bug in Balancer affected funds in its native DEX, BEX.
Four crypto-focused lawyers told Unchained that post-TGE refund rights are highly unusual and are typically triggered only if a project fails to launch a token. MetaLeX Labs co-founder Gabriel Shapiro said he had never heard of a post-TGE refund right being granted in any round. By comparison, Unchained noted that Flying Tulip, a project unveiled by Andre Cronje, granted all investors a refund right in its $200 million round, and that this term was publicly advertised. Unchained reported that the Berachain clause was not disclosed to other investors. Two attorneys familiar with capital markets regulation said it was an open question whether Berachain had a legal obligation to disclose the term under SEC Regulation D anti-fraud requirements, which require disclosure of "material information" without defining that term. Unchained also reported that at least one other Berachain investor held a most-favored-nation clause that could be triggered by the refund right, though attorneys said the outcome would depend on the specific terms.
Berachain's anonymous co-founder Smokey the Bera said in a statement that Unchained's reporting was "both inaccurate and incomplete," that Brevan Howard remains one of the largest investors, and that it participated in the Series B "on the same paperwork as all investors." In a post on X, Smokey said Nova's compliance team required the side letter to cover a scenario in which Berachain failed to launch and list, and that Nova committed to additional commercial arrangements, including providing liquidity on the network. The project did not respond to follow-up questions, including why the clause ran for a year after launch. Brevan Howard Digital and Nova co-founder Ashwin Ramachandran declined to comment, and Kevin Hu, who reportedly headed Nova and personally invested in Berachain's seed round, did not respond. Nova is reportedly being spun out from Brevan Howard over differences in risk tolerance and strategy, and Brevan Howard Digital remained listed as a backer on Berachain's website at publication.
BERA's decline has affected Berachain's investors. Unchained reported that Framework Ventures held 21,145,476 BERA at the end of Q2 2025, acquired at a total cost of about $72.4 million, an average of $3.42 per token, and that the position was down more than $50.8 million at then-current prices. Framework did not respond to requests for comment. BERA traded at $1.02 near an all-time low, with fully diluted valuation of roughly $526.7 million at press time, and Artemis data cited by Unchained showed roughly $367 million in net outflows from Berachain to other blockchains in 2025 as of the prior Friday. Unchained also reported that technical co-founder Dev Bear has left the project, per two sources, and that validators halted the network on November 3 after a code bug in Balancer affected funds in its native DEX, BEX.
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