In brief:

  • Vlad Matveev, a former fund manager, lost $250,000 after Cryptolab Capital went bust.
  • The US-based hedge fund lost 100% of its assets under management during Black Thursday, as a substantial sell-off tanked nearly all markets.

One cryptocurrency investor found out exactly how volatile crypto markets can be, after losing his $250,000 hedge fund investment over a matter of just days, according to the Financial Times.

Last year, 50-year old Vlad Matveev, a former fund manager, invested $250,000 into a hedge fund operated by Cryptolab Capital. The California-based, mixed-strategy hedge fund promised to generate "outstanding returns" by investing in crypto assets through a data-heavy approach to trading.

While the hedge fund managed to gradually increase its net assets value (NAV) and demonstrated a strong performance prior to Matveev's investment, signs of trouble began forming almost immediately after. According to Matveev's earlier blog post, the exchange started to see its NAV stagnate and eventually fell to the same level as before Matveev made his investment. It was then that he knew it was time to get out.

"I invested in June 2019, and the nice performance ended. The fund’s NAV was twitching back and forth, but by the end of February 2020 it remained at about the same level where I got in. That’s when I decided to take my money back," he said, in the blog post.

On March 8, 2020, Matveev asked to unsubscribe from the fund. Two days later he received a response from Cryptolab Capital notifying him that the fund suffered 20% losses, but Matveev still wanted out. A further two days pass, and Cryptolab Capital said it had lost 100% of its assets under management and was going to be liquidated.

Notably, these losses occurred on the worst day for cryptocurrency markets in recent history.

Matveev suspects that the entire fund may have been an elaborate ploy to siphon off investor funds. In the blog post, he made various accusations against the company and the people who ran it.

"I have a suspicion that such a spectacular blow up of the fund and such remarkable personalities managing it is not a coincidence," he said.

In response, a spokesperson for Cryptolab Capital told Decrypt: "Mr. Matveev is a sophisticated, high net worth investor (and former trader) who understood the high risk, speculative nature of the fund's investments in digital assets. While we are highly regretful for Mr. Matveev's and all of our investors' losses, we are troubled that while Mr. Matveev has admitted he lacks any evidence to support his accusations, he continues to make unsupported claims."

Cryptolab Capital further said that the "unprecedented volatility of Bitcoin in March 2020 resulted in substantial losses to the portfolio." The firm has been "transparent with Mr. Matveev and all of our investors concerning the circumstances that led to these losses," said the spokesperson.

Editor's note: This article was updated to include comments from Cryptolab Capital.