In October 2025, a stablecoin depegging event set off a chain reaction that, just four months later, led to the near-total collapse of on-chain asset management firm MEV Capital. Its assets under management (AUM) plummeted by 80% from a peak of $1.5 billion to roughly $300 million. The core team was absorbed by Luxembourg-based Belem, and partner Midas abruptly terminated its mandate. This was not just the downfall of a single firm—it was a glaring exposure of risk management vulnerabilities amid DeFi’s institutionalization. Drawing on DefiLlama data and multiple sources, this article reconstructs the timeline, unpacks the controversies, and explores the broader implications for the industry.
AUM Plummets 80%, Team Moves to Belem
According to DefiLlama, as of February 27, 2026, MEV Capital’s AUM had dropped to about $300 million, down 80% from its all-time high of $1.5 billion in October 2025. The immediate trigger was the depegging of the deUSD stablecoin on October 10, 2025, which set off automated liquidations across several protocols and resulted in direct losses exceeding $10 million for MEV Capital.
Meanwhile, on February 26, 2026, Luxembourg-based digital asset investment platform Belem Capital announced it had terminated its management mandate with MEV Capital and internalized its institutional asset management team. The group, comprising 10 asset management and risk technology specialists, is now fully integrated into Belem’s internal platform. Additionally, tokenization protocol Midas severed ties with MEV Capital and appointed RockawayX as the new strategy manager for its mMEV and mevBTC products.
Four Months from Peak to Collapse
MEV Capital, headquartered in Vilnius and Dubai with a predominantly French team, has long specialized in DeFi yield strategies—particularly those with significant exposure to Elixir’s deUSD stablecoin.
- October 10, 2025: deUSD depegs, with its price dropping below $0.98. This triggers automatic liquidation mechanisms across major lending and derivatives protocols. MEV Capital, heavily invested in deUSD yield strategies, suffers direct losses of over $10 million.
- Q4 2025: AUM begins a steep decline from its $1.5 billion peak. The company’s total revenue plunges 86.8% quarter-over-quarter, from $6.1 million in Q4 to $805,000 in Q1 2026.
- February 2026: According to The Big Whale, CEO Laurent Bourquin (formerly of Société Générale) withdraws from public view. Around 10 employees leave, with only about five remaining.
- February 26, 2026: Belem Capital formally announces the internalization of the MEV Capital team and ends the previous management mandate. On the same day, Midas announces that RockawayX will take over strategy management.
The Pitfall of a Single Strategy
DefiLlama’s data highlights both the speed and scale of MEV Capital’s collapse. AUM plummeted from $1.5 billion in October 2025 to about $300 million by February 2026—a loss of 80% in just four months.
The revenue hit was equally severe:
- Q1 2025: Total revenue peaked at $10,620,000.
- Q4 2025: Revenue fell to $6,100,000.
- Q1 2026: Revenue shrank further to $804,720—a 92.4% drop from the peak.
Quarterly profits also collapsed, falling from $608,910 in Q4 2025 to $99,020 in Q1 2026, an 83.7% decline.
These numbers point to a structural problem: overreliance on a single strategy. MEV Capital was heavily dependent on deUSD-related yield strategies. As an algorithmic stablecoin, deUSD’s mechanism proved vulnerable to collateral shortfalls and liquidity weaknesses during market stress. When the depegging occurred, cascading liquidations hit, causing not only direct losses but also redemption pressure and reputational damage, prompting massive client withdrawals.
Industrial Disaster or Growing Pains?
Market interpretations of the event focus on three main areas:
- "Industrial Disaster" in Risk Management: The Big Whale, citing insiders, called the deUSD depeg a "true industrial disaster" for MEV Capital. This points directly to a failure in risk controls—excessive concentration in a single asset and no hedging against liquidation thresholds.
- Leadership Accountability and Absence: CEO Laurent Bourquin’s "temporary break" has been seen by some as shirking responsibility, while the mass exodus of staff hints at governance issues.
- Belem’s "Emergency" Integration: Belem’s statement emphasized "concentration risk and execution framework," widely interpreted as a remedial move to address MEV Capital’s risk management gaps rather than a simple business expansion.
Others argue that MEV Capital’s fate reflects the growing pains of a nascent asset class under extreme conditions, and shouldn’t be blamed solely on the team. DeFi remains early-stage, with risk management tools and experience still maturing.
The Real Logic Behind Severance and Takeover
All parties’ statements must be seen in the context of industry dynamics:
- Belem says the "management mandate ended naturally," but the timing coincides with MEV Capital’s collapse, suggesting an urgent severance and asset protection move.
- Midas’s rapid switch to RockawayX signals a complete loss of confidence in MEV Capital’s risk management and underscores how institutional clients demand stability from strategy managers.
- Media reports of "about 10 departures" match Belem’s announcement of a "10-person team integration," indicating that MEV Capital’s core team has almost entirely migrated to Belem, leaving the original company a shell.
Overall, the public narrative aligns with the facts: MEV Capital’s crisis was triggered by the deUSD depeg, and Belem absorbed the team to maintain continuity for client assets. However, details on internal decision-making failures and executive responsibility remain opaque.
A Wake-Up Call for DeFi Institutionalization
The MEV Capital case will have far-reaching effects on the DeFi asset management sector:
- Institutional Investor Confidence Shaken: Traditional finance will now scrutinize DeFi risk even more closely, focusing on strategy concentration and liquidation mechanisms under stress.
- Evolution of Risk Models: Yield strategies involving stablecoins like deUSD will face tougher stress tests. Asset managers may diversify collateral and employ dynamic hedging.
- Heightened Regulatory Attention: With real client asset losses involved, regulators may revisit DeFi asset manager registration, custody arrangements, and disclosure requirements.
- Intensified Industry Consolidation: Firms like Belem and RockawayX, with stronger risk backgrounds, are absorbing business during the crisis, driving resources toward compliant, institutional-grade platforms.
Three Possible Future Scenarios
Facts
- MEV Capital’s AUM fell from $1.5 billion to $300 million.
- The company lost over $10 million due to the deUSD depeg, saw revenues collapse, and its team was absorbed by Belem.
- Belem and Midas have ended their previous partnerships, with Belem’s internal team and RockawayX taking over operations.
Opinions
- Media have labeled the event an "industrial disaster," highlighting risk control failures.
- Belem views internalizing the team as necessary to "integrate risk frameworks."
- Some observers see this as a normal shakeout in DeFi’s maturation process.
Speculation
- Short term (next 3–6 months): Other asset managers exposed to deUSD or similar stablecoins may reveal hidden losses, sparking a domino effect. However, firms like Belem are likely to accelerate the absorption of quality teams and assets.
- Medium term (6–12 months): The industry may develop standardized DeFi risk metrics—such as "strategy concentration limits" and "liquidation stress test disclosures"—as due diligence essentials for institutions.
- Long term (1 year+): If regulators step in, DeFi asset management could split into two camps—fully decentralized, permissionless protocols and regulated, compliant entities, with the latter dominating traditional capital inflows.
Conclusion
MEV Capital’s four-month rise and fall is a case study in the growing pains DeFi faces as it moves from the wild west to institutionalization. The deUSD depeg was only the spark; the real issue lay in overlooked risk controls and strategy resilience during rapid growth. By integrating the former team into its risk management framework, Belem demonstrated a path of "evolution in crisis." Looking ahead, only those who put risk management above unchecked expansion will survive the cycles and earn lasting institutional trust. For the crypto ecosystem as a whole, this episode is a stark reminder: transparency and robustness remain the foundation for DeFi’s mainstream acceptance.
