That is a parasitized aphid. You have some unpaid allies attacking them. Aphids distort leaves by sucking out juices and disrupting cell structure. There are a number of organic pesticides which help control them, but monitor for the beneficials before spraying. See how many swollen, immobile aphids are present. Squashing the bugs by hand on the plants sends a signal to their predators/parasites. Strong jets of water can knock them off, but on a pepper plant in flower can cause damage.

Leaves will also curl upwards as a stress response: too much heat, water problems etc. Feel free to recontact me as needed.