Investors lost over $100M after Invictus Capital moved funds into UST, Celsius against their wishes

Invictus Capital, a crypto investment firm based in South Africa, moved crypto from funds designated for investments with “no anticipated downside risk” into Terra USD and held the tokens through the UST de-peg event citing “pretty amazing interest” as justification for hholding through the crash.

Highlights

• Invictus Capital invested millions of dollars of investor funds into the Terra ecosystem to leverage outsized gains within “regulated” funds.
• Fund managers refused investor calls to sell UST before the peg broke below $0.93.
• Investors’ crypto assets were supposed to be in cold storage, but Invictus invested them in Celsius instead.
• The company founder was forced out after making a bad trade costing the company $4 million.
• Invictus Capital employees threatened to report the founder for fraud as leverage in the sale of one of the funds.
• Employees shut down all social media channels and suspended withdrawals.
• Invictus directors allegedly threatened the founder and chased him to his parent’s home.
• Invictus allegedly created a smear campaign against founder and ex-CEO Daniel Schwartzkopff.
• Invictus Capital is currently undergoing voluntary liquidation in the Cayman Islands through its holding company New World Holdings.
• The restructuring CEO attempted to use influence to prevent the story from being published.

Invictus Capital

Invictus Capital had roughly $135 million in assets under management at the time of the collapse of Terra Luna. A percentage of these funds were held in UST, which could be viewed as acting against the terms of the original whitepaper that referenced “USD equivalents with little anticipated drawdown risk.”

Around the same time, 50% of its assets nominated for cold storage were revealed to be held in Celsius. The funds are now locked, and Invictus Capital is teetering on the brink of bankruptcy and has filed for voluntary liquidation.

The firm suspended withdrawals and shut down all of its social media channels amid internal conflict and an outcry from investors demanding information on their holdings.

Communication from Invictus has been limited since early June, and a restructuring CEO, Haydn Hammond, has been appointed following the departure of founder and ex-CEO Daniel Schwartzkopff.

Invictus Capital is a public-facing entity representing several segregated portfolio companies in the Cayman Islands. Its offering is designed to allow investors a simple way to invest in cryptocurrencies while minimizing the downside risks.

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