Berachain Faces Scrutiny Over Nova Digital’s $25M Refund Clause in Series B Funding
Berachain, a layer-1 blockchain project, is under the microscope after revelations about a $25 million refund clause secured by lead investor Brevan Howard’s Nova Digital fund. The clause grants Nova the right to reclaim its entire investment until February 6, 2026—a provision legal experts describe as unusual for venture deals in the crypto space.
Anonymous co-founder Smokey the Bera disputes claims of irregularity, calling them "inaccurate and incomplete." The refund mechanism was triggered when Nova deposited $5 million into a Berachain wallet within 30 days of the project’s token generation event in February 2025. Some Series B investors were reportedly unaware of Nova’s preferential terms.
Framework Ventures, another backer, is sitting on significant losses—a reflection of Berachain’s ongoing challenges. The situation highlights tensions between traditional venture safeguards and crypto’s risk-tolerant culture.
