Berachain’s co-founder, known only as Smokey the Bera, has challenged recent reporting that Brevan Howard’s Nova Digital fund secured a $25 million refund right on its Series B investment.
Unusual terms raise transparency questions
Smokey described the coverage as “inaccurate and incomplete,” noting that the BERA token trades roughly 66% below Nova’s entry price, highlighting the ongoing market struggles.
Documents reviewed by Unchained indicated that Nova Digital received a post-launch refund clause allowing it to reclaim its $25 million investment until February 6, 2026, one year after Berachain’s token generation event. Attorneys familiar with token fundraising told Unchained that such provisions are highly unusual, typically reserved for projects that fail to launch tokens entirely.
The refund mechanism required Nova Digital to deposit $5 million into a Berachain wallet within 30 days of the token launch to activate the right. This structure mitigated downside risk while maintaining potential upside, a stark departure from conventional venture terms, where invested capital generally remains exposed to market performance.
Experts such as Gabriel Shapiro of MetaLeX Labs, who has advised on more than 50 token deals, noted that post-TGE refund rights are almost unheard of. Additionally, two Series B investors reported they were unaware that another participant had secured such preferential terms.
Foundation defends commercial agreements
Smokey the Bera defended the arrangement in a statement on X, emphasizing that Brevan Howard remains one of Berachain’s largest tokenholders. He explained that Nova’s compliance requirementsn demanded certain provisions to account for scenarios where locked BERA might not qualify as eligible investment under the fund’s strategy.
“All Series B participants signed the same paperwork, and Nova has committed to providing liquidity on the network post-launch,” Smokey said, adding that Unchained’s report overlooked context and may have been influenced by disgruntled former employees.
He also confirmed that no other Series B investor received MFN clauses and disclosed personal losses on liquid BERA purchases.
Bm Folks,
— Smokey The Bera 🐻⛓ (@SmokeyTheBera) November 25, 2025
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…
Market struggles and recovery efforts
BERA’s market performance has been challenging, falling more than 90% from its $11 all-time high to approximately $1.02. Framework Ventures, co-lead of the Series B alongside Nova, holds over 21 million BERA tokens, representing unrealized losses exceeding $50 million.
The network faced $367 million in outflows to competing blockchains in 2025 and temporarily halted operations on November 3 following a $12.8 million Balancer protocol vulnerability. Assets were fully recovered within 24 hours by a white-hat hacker.
a man can only dream (i am down 7figs on liquid buys, no OTCs, + chipotle doesnt allow franchises apparently!)
— Smokey The Bera 🐻⛓ (@SmokeyTheBera) November 25, 2025
In October, Berachain announced a potential recovery initiative when Greenlane Holdings, a smoking accessories company, invested $110 million for BERA tokens in a private placement for the digital asset treasury.
The deal attracted support from Polychain, Blockchain.com, Kraken, North Rock Digital, CitizenX, and dao5, with Papa Bear joining as an advisor.
Nova Digital is currently being spun out from Brevan Howard due to differing risk strategies. Once separated, Brevan Howard will have no involvement with Berachain, allowing Nova Digital to operate independently.
Roman Zaika
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