What To Know:
- Berachain denied giving Brevan Howard’s Nova Digital fund any special refund rights, calling the contested terms routine compliance measures.
- A side letter indicating a potential $25 million reclaim option drew concern as Framework Ventures faces over $50.8 million in unrealized losses on its BERA holdings.
- The denial comes days after Berachain recovered nearly all funds from a major exploit that halted the chain and caused around $12 million in losses on its BEX exchange.
Berachain is pushing back against claims that it granted Brevan Howard’s Nova Digital fund a privileged refund option during its Series B round. The push back comes in as pressure builds across the crypto industry amid sharp price declines and investor deleveraging. The project’s co-founder said the terms flagged in recent reports were compliance arrangements that follow industry precedent. The co-founder also rejected the suggestion that any investor received a special economic advantage.
Berachain Denies Refund Rights to Brevan Howard
Bm Folks,
I wanted to put something out here to set the story straight in light of the recent hit piece. I also didn’t want to write a knee-jerk response without getting feedback from our legal team (given allegations made) and some of our largest stakeholders who have been…
— Smokey The Bera 🐻⛓ (@SmokeyTheBera) November 25, 2025
The dispute surfaced after documents tied to Berachain’s financing indicated that Nova Digital held a right allowing it to reclaim up to $25 million under specific conditions after Berachain’s token generation event. The language appeared in a side letter rather than in the main term sheet. This triggered concern among other market investors who noted that such clauses can influence risk exposure, post-event valuation, and investor priority.
Apart from this, Framework Ventures, which co-led the Series B round, is now facing more than $50.8 million in unrealized losses on over 21 million BERA tokens purchased for $72.4 million. The size of the paper losses has elevated tension around any hint of unequal information among investors. The fund’s exposure highlights how contractual nuance can become a point of pressure when markets decline and token valuations reset.
Berachain’s leadership has argued that the clause has been mischaracterized. They maintain that the structure was part of a routine process tied to regulatory and compliance obligations common in large venture deals involving digital assets. They did not provide the underlying documents but said the framework aligns with what other companies in the sector have implemented during capital raises.
The episode has erupted during a volatile moment for the broader crypto market. Bitcoin, which reached an all-time high of $126,080 in early October, is now trading near $87,779 after a 1.1% uptick over the past day. The drop places the asset down more than 34% from its peak and has intensified concerns across trading desks following a month marked by leverage unwinds and defensive positioning.
As market volatility continues to hound the sector, founders and investors are taking a closer look at the mechanics behind their agreements.
Berachain was recently in news after a major exploit forced the blockchain to halt activity, freeze liquidity pools and begin one of its largest recovery operations to date. The Berachain Foundation recently issued an update to users, saying the platform has secured near-total retrieval of the stolen assets and is preparing a structured reimbursement process.
The attack stemmed from a vulnerability in Balancer V2’s Composable Stable Pools. Several chains were hit. Damage across ecosystems reached about $128 million. Berachain’s decentralized exchange, BEX, which relies on a fork of Balancer V2’s codebase, absorbed roughly $12 million in losses. The impact was immediate. The team suspended all affected vaults, stopped HONEY minting, and executed a coordinated emergency halt with validators across the network. For several days, the chain remained frozen.
A white-hat actor then contacted the foundation and claimed responsibility for the exploit. According to the project, this individual pre-signed transactions to return the stolen holdings to Berachain’s deployer address once the chain resumed block production. Operations restarted on November 4. Shortly after, the recovered assets began flowing back to the foundation’s wallet.
The foundation released a detailed breakdown of what has been retrieved. The list includes 5.7 million sUSDe, 2.15 million USDe, 3.2 million HONEY and smaller amounts of wBERA, iBERA, wETH and beraETH. The total covers nearly the entire value lost during the attack, aside from a few minor discrepancies and white-hat-owned tokens that remain under review. The scale of the recovery was unusual given the speed of the exploit and the size of the vulnerability.
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