Berachain Faces Investor Refund Pressure Ahead of 2026 Deadline

Nova Digital can demand $25M refund, leaving Berachain at risk, as BERA trades far below Series B $3 price.

Framework Ventures holds $72.4M in BERA, facing $50M+ losses amid refund rights and token outflows.

Technical issues and app migrations have shrunk Berachain’s ecosystem, challenging investor confidence and adoption.

Berachain, the once-hyped bear-themed blockchain, faces heightened scrutiny as its co-lead investor, Nova Digital, holds a unique refund right valid until February 6, 2026. This unusual clause allows Nova Digital, a fund within Brevan Howard Digital, to demand repayment of its $25 million Series B investment if BERA tokens underperform

Hence, unlike typical venture investments, Nova Digital can exit with minimal risk, while Berachain absorbs the downside. The clause has triggered concern among other investors, as BERA currently trades far below its $3 Series B price, raising questions about fairness and disclosure.

The refund right emerged from a side letter dated March 5, 2024, attached to Brevan Howard Digital’s term sheet. Nova Digital must deposit $5 million within 30 days post-TGE to exercise the right, but it remains unclear whether it has done so. Experts describe this arrangement as highly unusual

Gabriel Shapiro, a longtime crypto attorney, noted, “I have never heard of a post-TGE refund right being granted in any round.” Consequently, Berachain now navigates a complex situation where one investor’s option could significantly impact the project’s finances and other backers.

Series B Terms Spark Controversy

Besides Nova Digital, Berachain’s Series B included Framework Ventures, Polychain, Hack VC, Arrington Capital, and Tribe Capital. Framework Ventures co-led alongside Nova and purchased roughly $72.4 million worth of BERA at an average price of $3.42 per token

Currently, Framework faces over $50 million in unrealized losses. Additionally, some Series B investors reported being unaware of Nova Digital’s refund right, raising potential regulatory concerns regarding material information disclosure and Most Favored Nation clauses. Hence, legal and financial experts are scrutinizing whether Berachain complied with its obligations to other investors.

Moreover, the refund right’s implications extend beyond legality. BERA has suffered significant outflows, with $367 million moving to other blockchains in 2025. Technical setbacks also challenged the project, including a temporary network halt after a DeFi bug on November 3, 2025

Although $12.8 million was recovered by white-hat hackers, investor confidence appears shaken. Berachain’s ecosystem has contracted, with several apps migrating to competing chains. Despite these challenges, co-founders like Smokey the Bera and Papa Bear remain publicly committed, attempting to reshape the narrative through partnerships and treasury-backed initiatives.

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