An FTX customer has filed a lawsuit against Olympus Peak, a hedge fund that bought his claim in the bankrupt cryptocurrency exchange, alleging that the fund underpaid him and is now set to profit more than $1m as a result, according to a report by Bloomberg.

Nikolas Gierczyk, a California resident, claims that Olympus Peak owes him additional compensation after he sold his $1.59m claim last year at a steep 42% discount. He argues that with FTX's recently approved bankruptcy reorganisation plan, customers are expected to recover between 129% and 146%, far exceeding what was initially anticipated.

Gierczyk asserts that his agreement with Olympus Peak included a provision for additional recovery if the payouts exceeded expectations, but he says the hedge fund has refused to honour this clause. The lawsuit was filed on Thursday in federal court in Manhattan.

A lawyer for Olympus Peak, Ariel Lavinbuk, dismissed the lawsuit as baseless, stating, "This lawsuit is entirely without merit and is based on a plain misreading of the parties’ contract."

FTX's bankruptcy case is unusual in that the exchange has managed to accumulate billions more than needed to cover customer losses following its collapse in November 2022, largely due to a strong rebound in the cryptocurrency market.

It is common for hedge funds to purchase claims on distressed assets at a discount, offering claimants immediate liquidity while the funds wait for potentially higher recoveries through the bankruptcy process.

According to Gierczyk, the purchase agreement with Olympus Peak stipulated that the hedge fund would buy back any excess distribution from the bankruptcy at the same 42% discount he originally sold his claim for. However, he claims the fund has reneged on its promise.