Undisclosed Repayment Provision Sets Brevan Howard in Opposition to Berachain

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Undisclosed Repayment Provision Sets Brevan Howard in Opposition to Berachain

Bitget-RWA2025/11/24 19:34

By:Bitget-RWA

- Brevan Howard secured a $25M refund clause in Berachain's $142M Series B, allowing recovery if BERA token underperforms within a year. - The SAFT-linked mechanism requires $5M deposit post-TGE, creating liquidity risks if Berachain must repay $25M by 2026. - BERA's 67% price drop to $1 raises doubts about clause viability, while legal experts call such terms "extremely rare" in token financing. - The undisclosed clause highlights tensions in crypto VC structures, potentially setting precedents for prefer

Nova Digital Fund, managed by Brevan Howard, has landed an uncommon, low-risk investment in

Berachain

, a blockchain company, by securing a $25 million refund entitlement linked to its Series B fundraising,

as reported

. Documents reviewed by Unchained reveal that this provision

enables the fund’s crypto division to reclaim its capital

within a year if the

BERA

token fails to meet performance expectations, essentially shielding the investment from market swings. This deal, co-led with Framework Ventures, was part of a $142 million fundraising round that gave Berachain a $1.5 billion valuation in early 2025

per LookOnChain

This refund feature, structured through a simple agreement for future tokens (SAFT),

obligates Brevan Howard to transfer $5 million

to Berachain within 30 days after the token generation event (TGE), which took place on February 6, 2025. Should the fund opt to use its right by February 6, 2026, Berachain would need to raise $25 million in cash to return the investment—a move that could create liquidity issues for the startup

as noted by Coinotag

. Legal professionals in the sector describe such terms as "highly unusual" in token deals, pointing out that refund rights are generally only available if a project fails to issue tokens, not after TGE

according to LookOnChain

Since then, BERA’s value has dropped significantly, trading near $1 in November 2025—a 67% decline from Brevan’s $3 entry price per token. The token’s fully diluted market cap is now $536.7 million,

according to The Block

, casting doubt on the practicality of the refund clause in a declining market. The one-year lockup for investor tokens adds further complications:

using the refund right may require Brevan to relinquish

its BERA tokens, though the prospect of recovering $25 million remains attractive.

Berachain is an Ethereum-compatible Layer 1 blockchain built with the

Cosmos

SDK, and has gained a devoted following thanks to its roots in the 2021 "Bong Bears" NFT project. The Series B round also saw investments from Arrington Capital, Polychain, and Tribe Capital, but it is not clear if these investors received similar guarantees

as reported by The Block

. Legal analysts have raised concerns about whether the clause can be enforced, especially since it was not made known to all stakeholders,

making it harder for Berachain to set expectations

if the refund is exercised.

This deal highlights increasing doubts about crypto venture capital models, where conventional risk-return principles often conflict with innovative financial structures. While Brevan Howard’s strategy limits potential losses, some warn it could pave the way for special treatment in token offerings, undermining confidence among both retail and institutional participants

according to LookOnChain

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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