Crypto Faces Fresh Risk Management: Brevan Howard’s Berachain Refund Provision Ignites Discussion

Brevan Howard’s $25 million venture capital backing of blockchain initiative

has sparked debate after it was revealed that for its investment, essentially shielding its capital from loss. According to a side agreement reviewed by Unchained, Nova Digital, a Brevan Howard affiliate, can retrieve its funds if Berachain’s native asset, , fails to meet performance expectations. This right is valid until February 6, 2026, scheduled for February 2025.

Currently, BERA is trading near $1.01,

, resulting in a fully diluted market cap of $536.7 million. The refund arrangement, which requires Nova to deposit $5 million within 30 days of the TGE, has drawn skepticism from legal professionals in the crypto sector. , who has assessed more than 50 token agreements, described the clause as “extremely rare,” pointing out that it diverges from typical venture capital norms.

rejected suggestions of favoritism, stating that all Series B participants were offered the same deal. The company clarified that the side agreement was a mutually agreed solution to address Nova’s liquidity requirements, rather than a unique privilege. However, from the same round told Unchained they were not informed about the refund provision when investing.

The Series B fundraising, jointly led by Brevan Howard’s Nova Digital and Framework Ventures, placed Berachain’s valuation at $1.5 billion.

, is now facing unrealized losses exceeding $50.8 million as BERA’s value remains depressed. At the same time, in March, highlighting the project’s on-chain expansion despite price instability.

This controversy reflects wider challenges in crypto investment. While traditional venture capital is built on high risk and potential high returns, refund clauses like Berachain’s could alter institutional investor expectations.

commented, “This could set a new standard for how funds protect themselves from losses in volatile assets.” Brevan Howard, which acquired Nova Digital from Dragonfly Capital in 2023, .

With the crypto sector facing both regulatory pressures and falling prices, the Berachain situation highlights the importance of clear investment terms.

, the resolution could shape how upcoming blockchain ventures approach their fundraising strategies.