Bhutan is secretly investing in cryptocurrencies, according to new bankruptcy filings.
Bhutan, the backwater Himalayan kingdom, has quietly invested millions of dollars in cryptocurrencies, including bitcoin and ether, over the past year.
Forbes reviewed BlockFi and Celcius bankruptcy filings and uncovered the country’s secret cryptocurrency wallet. Druk Holding & Investments (DHI), the $2.9 billion investment arm of Bhutan’s sovereign, has been a client of both bankrupt cryptocurrency lenders.
Bhutan has not publicly disclosed DHI’s investments. Its contents raise questions about Bhutan’s relationship to the cryptocurrency economy. It is unclear whether the holdings support recent and ongoing modernization initiatives in Bhutan.
In February 2022, DHI agreed to borrow $30 million from BlockFi but defaulted on the loan. BlockFi filed a complaint with the DHI last month, a lawyer urged BlockFi. Even after the lender liquidated the collateral of 1,888 bitcoins, there was still an unpaid balance of $820,000. DHI CEO Ujwal Deep Dahal told Forbes via email, “We don’t have any comments as the matter with BlockFi has been settled. We cannot comment due to confidentiality.”
Bhutan’s secret about her holding company
Months ago, DHI was also identified as an institutional client of Celsius. The company made several trades between April and June 2022, depositing, withdrawing, and borrowing bitcoin, ether, tether, and a few other cryptocurrencies.
It is not clear where this money originated from or how officials used it. But DHI’s holdings could lead to further legal action as Celsius’ lawyers have indicated their intent to seek “refunds” of deposits made within 90 days of its bankruptcy.
DHI investing tens of millions of dollars in crypto might seem like an odd choice. Given the holding company’s supposed role in promoting local projects, it seems odd that DHI would invest in cryptocurrency. If it were a sovereign wealth fund, it would be the first to own cryptocurrencies directly. the Royal charterDHI, which set up the fund in 2007, says the purpose of DHI is to “protect national wealth, manage and enhance this wealth through prudent investments”.
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