The Berachain Refund Right leaks reveal a hidden $25M investor protection clause, sparking debate on fairness, transparency, and funding.
Author: Akshat Thakur
November 24, 2025 — The Berachain Refund Right revelation has exposed a secret $25 million safety clause granted to Brevan Howard’s Nova Digital fund, raising major concerns about fairness, transparency, and investor treatment in crypto funding rounds. The leaked term allows Nova to reclaim its entire Series B investment after TGE, fueling debates across the industry on asymmetric protections.
The Berachain Refund Right disclosure has sparked debate after documents revealed that Nova Digital, an arm of Brevan Howard Digital, secured a unique clause allowing full or partial refund of its $25 million Series B investment.
Valid for one year after TGE, the clause gives Nova downside protection rarely seen in crypto, creating a structural imbalance between institutional investors and retail holders. The revelation emerged from documents obtained by Unchained and amplified by journalist Jack Kubinec.
According to the leaked agreements, Nova Digital negotiated a right to reclaim its investment if token performance fell short post-launch. Four lawyers consulted by Unchained described the term as highly unusual, noting that Nova faces virtually no downside risk if BERA appreciates, the fund profits; if it declines, Nova can simply request reimbursement. Two other Series B investors confirmed they were not informed of this clause, igniting concerns about undisclosed preferential treatment.
The Berachain Refund Right opens broader questions about transparency in crypto funding. Framework Ventures, the other Series B co-lead, has already accumulated over $50 million in paper losses due to BERA’s decline from its private-round valuation.
If Nova exercises its refund, Berachain may be forced to liquidate treasury assets at depressed prices, applying additional downward pressure to the ecosystem. The situation mirrors previous controversies where VC protections came at the expense of retail stability.
The leak is likely to influence future crypto fundraising, with rising pressure for equal-disclosure standards similar to public-market term-sheet requirements. Legal experts suggest that hidden downside-protection clauses may become a regulatory target, especially when other investors remain uninformed.
For the Cosmos ecosystem and the broader alt-L1 market, Berachain’s handling of the situation may determine long-term trust and developer momentum.
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