The founder of Berachain accused the report "Brevan Howard receives a $25 million refund right" of being "inaccurate and incomplete."

Smokey the Bera, the anonymous co-founder of Berachain, has raised objections to an investigative report. The report reveals that the leading investor, Nova Digital Fund under Brevan Howard, obtained a unique $25 million refund right in its Series B investment. Smokey the Bera claims that the report is incomplete and inaccurate.

This disclosure has intensified scrutiny over the financing methods and transparency standards of the Layer-1 blockchain, especially given that the trading price of the BERA token is only $1.02, which is approximately two-thirds lower than the issuance price of $3 for Nova Digital.

Files obtained by Unchained show that Brevan Howard's Nova fund has been granted an unusual post-issuance refund clause, allowing it to reclaim the entire $25 million investment before February 6, 2026 (one year after the issuance of Berachain tokens).

Four lawyers specializing in the cryptocurrency field stated that this arrangement is extremely rare in token financing, and the right to a refund is typically triggered only when the project fails to successfully issue tokens.

The refund mechanism requires Nova Digital to deposit 5 million USD into the Berachain wallet within 30 days after the token issuance on February 6, 2025, to activate this option. This structure eliminates the downside risk for the Brevan fund while retaining the upside potential, which is in stark contrast to traditional venture capital where funds are always at risk regardless of performance.

He explained that Nova's compliance team requires the inclusion of relevant terms to address the situation where the locked BERA purchased through financing may not meet the qualified investment conditions stipulated by the fund's liquidity strategy.

“Their investments involve multiple complex business agreements, but like other investors, they participated in the Series B financing, and the signed documents are the same,” Smokey wrote, adding that Nova committed to providing liquidity after the network launch.

He believes that the report by Unchained is incomplete and implies that disgruntled former employees were involved in the reporting. The foundation insists that, although mentioned in the article, other Series B purchasers did not receive such treatment terms. When asked about this matter, Smokey revealed that he lost seven figures on the purchase of liquidity BERA, thereby refuting speculation about insider selling. (Cryptonews)