Berachain Founder Calls $25M Refund Report “Inaccurate and Incomplete”
Berachain’s nameless co-founder, Smokey the Bera, has disputed investigative reporting revealing that lead investor Brevan Howard’s Nova Digital fund secured a novel $25 million refund proper on its Series B funding, calling the protection incomplete and inaccurate.
The disclosure has intensified scrutiny over the layer-1 blockchain’s funding practices and transparency requirements, significantly because the BERA token trades at $1.02, roughly two-thirds beneath Nova Digital’s $3 entry value.
Documents obtained by Unchained present Brevan Howard’s Nova fund obtained an uncommon post-launch refund clause permitting it to reclaim its whole $25 million funding till February 6, 2026, one 12 months after Berachain’s token generation event.
Four crypto-focused attorneys told Unchained that such preparations are extremely uncommon in token fundraises, the place refund rights usually solely set off if initiatives fail to launch tokens in any respect.
Unusual Terms Raise Transparency Questions
The refund mechanism required Nova Digital to deposit $5 million right into a Berachain pockets inside 30 days of the token launch on February 6, 2025, to activate the choice.
This construction eradicated draw back threat for Brevan’s fund whereas preserving upside potential, which is sort of totally different from the standard enterprise investments, the place capital stays in danger no matter efficiency.
MetaLeX Labs co-founder Gabriel Shapiro, who has labored on over 50 token fundraising offers, mentioned within the report that he had by no means encountered a post-TGE refund proper in any spherical.
Two buyers in Berachain’s Series B advised Unchained they weren’t knowledgeable that one other participant had secured refund rights.
Aaron Brogan, founding father of Brogan Law, famous such a clause possible triggers normal Most Favored Nation provisions that assure early buyers entry to phrases supplied to later backers.
The association might violate MFN rights held by at the least one different Berachain investor, in response to sources accustomed to the matter.
Foundation Defends Commercial Agreements
Smokey the Bera defended the association in a prolonged assertion posted on X, asserting that Brevan Howard stays considered one of Berachain’s largest tokenholders.
Bm Folks,
I wished to place one thing out right here to set the story straight in gentle of the current hit piece. I additionally didn’t need to write a knee-jerk response with out getting suggestions from our authorized crew (given allegations made) and a few of our largest stakeholders who’ve been…
— Smokey The Bera
(@SmokeyTheBera) November 25, 2025
He defined that Nova’s compliance crew required provisions to deal with situations wherein locked BERA bought via the financing won’t qualify as an eligible funding beneath the fund’s liquid technique.
“Their investments contain a number of advanced business agreements, however they participated within the collection B fundraise on the identical paperwork as all buyers,” Smokey wrote, including that Nova dedicated to offering liquidity on the community following launch.
He characterised Unchained’s reporting as incomplete and recommended disgruntled former staff contributed to the story.
The basis maintains that no different Series B purchasers obtained MFN clauses regardless of claims within the article.
When being requested, Smokey disclosed being down by seven figures on liquid BERA purchases, countering hypothesis about insider promoting.
a person can solely dream (i’m down 7figs on liquid buys, no OTCs, + chipotle doesnt permit franchises apparently!)
— Smokey The Bera
Market Struggles and Recovery Efforts
BERA’s value has collapsed by over 90% from its $11 all-time high to present ranges round $1.02, leaving main buyers considerably underwater.
Framework Ventures, which co-led the Series B alongside Brevan Howard’s Nova fund, held 21,145,476 BERA tokens by the tip of Q2 2025, acquired at roughly $72.4 million, representing paper losses exceeding $50.8 million at present costs.
The community has skilled roughly $367 million in internet outflows to competing blockchains in 2025, in response to Artemis information.
Most not too long ago, validators halted the chain on November 3 after a Balancer protocol vulnerability threatened $12.8 million in funds.
However, operations resumed inside 24 hours, and the belongings have been recovered from a white-hat hacker.
Berachain introduced a possible turnaround initiative in October when smoking equipment firm Greenlane Holdings revealed a $110 million personal placement to accumulate BERA for a digital asset treasury.
The DAT drew backing from Polychain, Blockchain.com, Kraken, North Rock Digital, CitizenX, and dao5, with Papa Bear set to function firm advisor in response to SEC filings.
Currently, Nova Digital is being spun out from Brevan Howard as a consequence of variations in threat tolerance and technique.
The fund will function independently, and Brevan may have no involvement with Berachain as soon as the separation is full.
The publish Berachain Founder Calls $25M Refund Report “Inaccurate and Incomplete” appeared first on Cryptonews.
