Olympus Peak Faces Accusation by FTX Customer

Hedge fund Olympus Peak is facing an accusation by an FTX customer, Nikolas Gierczyk, who claims the firm owes him over $1 million.

The crypto community has been captivated by a lawsuit filed by a customer of the bankrupt cryptocurrency exchange FTX. According to Bloomberg, Nikolas Gierczyk, a California resident, has filed a lawsuit against Olympus Peak Trade Claims Opportunities Fund, alleging that the hedge fund failed to adequately compensate him for his claim in the FTX bankruptcy proceedings.

Gierczyk sold his $1.59 million FTX claim to Olympus Peak last year at a substantial 42% discount, netting him approximately $900,000. Nevertheless, Gierczyk argues that Olympus Peak could make over $1 million from the arrangement even though he receives substantially less following the recent approval of a bankruptcy reorganization plan by FTX. The plan promises to repay customers between 129% and 146%.

Gierczyk files a lawsuit in pursuit of an additional bankruptcy payout

Gierczyk filed a lawsuit in Manhattan federal court on Thursday, asserting he has an explicit right to additional compensation from Olympus Peak under their purchase agreement. His attorneys stated the following:

“Olympus Peak clearly refused to honor their agreement.”

Gierczyk has initiated legal proceedings in response to this violation, contending that the hedge fund’s conduct was financially detrimental and unjust.

FTX has amassed billions over the required amount to compensate customers for the losses incurred due to its November 2022 collapse, which is uncommon for bankruptcy cases. The value of FTX’s remaining assets has significantly increased due to a robust cryptocurrency market over the past year, which has contributed to this surplus. Consequently, claimants such as Gierczyk may receive payouts that are significantly greater than those that were initially anticipated.

Based in Greenwich, Connecticut, Olympus Peak has yet to respond to the allegations outside its regular business hours. The ethical practices of firms involved in distressed asset acquisitions are called into question by the hedge fund’s purported refusal to honor the additional recovery rights.

The Gierczyk v. Olympus Peak Trade case is being heard in Manhattan at the US District Court for the Southern District of New York. Both parties will present comprehensive arguments regarding the legitimacy of the purchase agreement and Olympus Peak’s responsibilities in accordance with the terms negotiated with Gierczyk as the trial progresses.

FTX’s bankruptcy yields $14 billion

It was reported that a Delaware federal bankruptcy judge has approved a reorganization plan enabling most FTX creditors to profit from their investments. Two years following the collapse of FTX, the refund plan will distribute more than $14 billion to FTX customers, making it one of the most significant asset distributions in bankruptcy history.

John Ray, the new CEO, declared that 119% of the claims of 98% of creditors will be paid, surpassing FTX’s $11.2 billion debt with up to $16.5 billion in assets. This recovery resulted from a 260% increase in the value of Bitcoin and asset sales since FTX’s bankruptcy.

With $900 million from the sale of FTX’s Anthropic stake, the estate intends to distribute its products worldwide. In the interim, Sam Bankman-Fried was convicted and sentenced to 25 years, which marked the conclusion of a tumultuous chapter and established a precedent for future cryptocurrency bankruptcies.