Nova Digital’s $25M Refund Right Sparks Debate Over Berachain’s Investor Terms

Leaked documents indicate Brevan Howard’s Nova Digital fund secured a conditional right to reclaim its $25 million Berachain investment, though the project disputes any suggestion of preferential treatment.

Background to the Investment Agreement

These legal documents have renewed scrutiny around Berachain’s Series B funding, showing that Brevan Howard’s Nova Digital fund was granted a contractual option to request a refund on its $25 million investment. The documents, obtained by Unchained, outline a side agreement dated March 5, 2024, allowing Nova to reclaim “some or all” of its capital for twelve months following Berachain’s Feb. 6, 2025 token generation event (TGE). If exercised, Berachain would be required to return the funds within five business days. The status of a related $5 million deposit, described as relevant to activating the clause, remains unconfirmed by either party.

Details of the Refund Clause

According to the documents, Nova can seek a refund until Feb. 6, 2026, marking one year after the TGE. Unchained reported that the provision was part of Nova’s participation in the April 2024 Series B round. The publication also released the side letter signed by Berachain general counsel Jonathan Ip and Nova director Carol Reynolds. The report noted that BERA, Berachain’s native token, trades near $1.01, well below Nova’s $3 entry price. The network reached a total value locked of roughly $3.5 billion earlier in the year, highlighting its rapid growth despite recent questions surrounding investor terms.

Berachain’s Response to the Allegations

Berachain strongly rejected claims that Nova received preferential treatment. The project’s anonymous founder, Smokey The Bera, argued that the Unchained report was “inaccurate and incomplete,” saying Brevan Howard invested through its Abu Dhabi-based Nova vehicle under terms identical to other participants

Smokey claimed,

“Brevan Howard co-led our Series B a year ago, out of their Abu Dhabi office, via Nova, a new liquid-only vehicle on the same terms as all other investors. Nova had approached Berachain to lead the round some months prior to this.”

The founder stressed that all investors were subject to the same baseline agreements.

Clarifying the Purpose of the Side Letter

Smokey acknowledged the existence of a side letter but said the provisions reflected Nova’s internal operational requirements rather than special privileges. The clause allowed Nova to request a refund if the BERA token significantly underperformed relative to its initial $3 investment price. According to the founder, this mechanism was structured to protect Nova’s principal rather than confer an advantage over other participants. They reiterated that the agreement was mutually negotiated and tied to the fund’s risk management framework, not a preferential arrangement offered to a single investor.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice