An FTX customer is suing hedge fund Olympus Peak, alleging the firm owes him additional recovery after he sold his claims in the collapsed trading platform.
Nikolas Gierczyk, an FTX user from California, reportedly sued the hedge fund Olympus Peak, claiming the company could gain more than $1 million from their deal. Gierczyk alleges the hedge fund failed to honor a right to further recovery he had negotiated in their agreement.
According to a Bloomberg report, Gierczyk sold his $1.59 million claim against FTX to the hedge fund at a 42% discount, receiving a $930,000 payout. However, with FTX’s reorganization plan approved, customers are now expected to receive 129% to 146% of their claims.
This means Olympus Peak may collect between $2 million and $2.3 million for the claims it bought from Gierczyk, potentially profiting more than $1 million from the transaction.
Gierczyk argues that Olympus Peak refused to honor an agreement regarding additional recovery rights.
Cointelegraph contacted Olympus Peak for comment but did not receive an immediate response.
Not everyone wins in history’s “largest” bankruptcy distribution
On Oct. 7, United States Bankruptcy Judge John Dorsey approved the reorganization plan for the bankrupt crypto exchange. FTX CEO and chief restructuring officer John J. Ray III said that the approval moves the company closer to distributing cash to creditors.
Ray noted that they are poised to return “100% of bankruptcy claim amounts plus interest for non-governmental creditors.” He described the upcoming repayments as the “largest and most complex bankruptcy estate asset distribution in history.
Related: FTX says Caroline Ellison to give up ‘all of her assets’ in settlement
While users and creditors may be paid, some say the reorganization plan does not account for token gains between November 2022 and 2024. FTX creditor Sunil Kavuri claimed on Sept. 28 that creditors would only get 10–25% of their crypto back through the new plan.
Many FTX users, like Gierczyk, have sold their claims to hedge funds. In 2022, as FTX, Celsius Network, BlockFi and Voyager Digital filed for bankruptcy, hedge funds and debt investors began purchasing claims from their users.
Some users sold their claims on marketplaces instead of waiting for the lengthy bankruptcy process. By 2022, more than 10,000 claims were listed on platforms like Xclaim.
FTX claims sold in the Claims Market by Cherokee Acquisition. Source: Claims Market
Meanwhile, according to the Claims Market by investment platform Cherokee Acquisition, over $600 million in FTX claims has been sold.
Magazine: The $2,500 doco about FTX collapse on Amazon Prime… with help from mom
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