An FTX user is suing Olympus Peak, a hedge firm that purchased his claim on the insolvent cryptocurrency exchange. Nikolas Gierczyk from California sold his $1.59M claim to Olympus Peak at a 42% reduction last year. He is now alleging underpayment.
The complaint is based on FTX's recent bankruptcy restructuring plan approval. This scheme intends to compensate clients up to 146% of their claim value. Gierczyk claims Olympus Peak owes him additional money based on their agreement. He filed a complaint in Manhattan Federal Court claiming he negotiated rights to extra recovery that Olympus Peak allegedly refuses to honor.
FTX's bankruptcy has taken an unusual turn. The exchange has amassed billions more than needed to cover losses. This surplus largely results from the crypto market's strong performance.
A judge approved FTX's reorganization plan on Monday. The business may now begin dispersing around $16B to creditors. Hedge funds frequently acquire troubled assets at a discount, profiting from the protracted bankruptcy procedure. This example demonstrates possible conflicts in such agreements.
