The founder of Berachain has strongly refuted a recent report that suggested one of its primary Series B investors was granted the right to a $25 million refund. The founder described the report's framing as both "incomplete" and "inaccurate."
The report indicated that Berachain provided Brevan Howard's crypto-focused fund, Nova Digital, with a one-year right to a refund on its $25 million investment made during Berachain’s Series B round in April 2024.
Accompanying the report was a side letter, signed by Berachain's general counsel Jonathan Ip and Nova director Carol Reynolds. This letter stated that Nova could recoup "some or all" of its investment for a period of "twelve months following" Berachain’s token generation event (TGE).
Berachain's TGE, also known as token mint, occurred on February 6. This means Nova would reportedly have the ability to claim a refund on its investment until February 6, 2026.
Berachain Founder States Brevan Was Offered Same Terms as Other Investors
Smokey The Bera, Berachain’s anonymous founder, stated that the report was "inaccurate and incomplete." He clarified that Brevan's "investments involve several complex commercial agreements, but they participated in the Series B fundraise on the same paperwork as all investors."
Smokey elaborated that Brevan Howard, through Nova, co-led their Series B round a year prior from their Abu Dhabi office. Nova, described as a new liquid-only vehicle, participated on the "same terms as all other investors." He noted that Nova had approached Berachain to lead the round several months before the investment was finalized.
Nova Agreed to Additional Arrangements, According to Smokey
Smokey explained that Nova requested a provision to "guard for a scenario in which Berachain failed to TGE and get listed."
He stated that if such a scenario occurred, the locked Berachain (BERA) tokens that Nova purchased would "not be an eligible investment via Nova’s liquid strategy."
Consequently, Berachain entered into the side letter that was published in the report. This agreement also committed Nova to "additional commercial arrangements, including an agreement to provide liquidity on the network, which was only possible upon launch," Smokey added.
He emphasized that the letter was not created "to close the deal with a party who otherwise would not have been interested, or to prevent against post-launch losses." Furthermore, he noted that such provisions "generally has precedent."
Smokey also highlighted that Nova is among the largest tokenholders of Berachain and functions as a liquidity provider. Nova holds both locked BERA acquired during the blockchain's Series B funding and additional BERA purchased on the open market.
"They have increased their BERA exposure over time, despite running a liquid fund in a harsh alt environment," Smokey stated.
Smokey and the Berachain Foundation were contacted for comment via X. Brevan Howard did not provide a response to a request for comment outside of regular business hours.
The BERA token is currently trading at $1.05, showing a 3.2% increase on the day. This is a 93% decrease from its peak of $14.83, which it reached upon its launch in February.