Bhutan, the remote Himalayan kingdom known for its stunning landscapes and the unique concept of Gross National Happiness, has secretly invested in cryptocurrencies, as revealed by recent bankruptcy filings. The country has reportedly invested millions of dollars in digital assets like Bitcoin and Ether, raising questions about its relationship with the crypto economy and how these investments align with its modernization initiatives.
Unraveling Bhutan’s Crypto Investments: The BlockFi and Celsius Connection
An investigation of the bankruptcy filings of crypto lenders BlockFi and Celsius by Forbes revealed Bhutan’s hidden crypto investments. Druk Holding & Investments (DHI), the nation’s $2.9 billion sovereign investment arm, was found to be a customer of both the now-bankrupt companies.
Despite no public disclosure of these investments by DHI, the extent of their involvement with cryptocurrencies raises intriguing questions about the kingdom’s stance on the burgeoning digital economy.
In February 2022, DHI borrowed $30 million USDC from BlockFi but defaulted on the loan repayment. That led BlockFi’s lawyers to serve a complaint to DHI in the following month. Even after liquidating 1,888 bitcoin as collateral, an unpaid balance of $820,000 remained.
Ujjwal Deep Dahal, the CEO of DHI, communicated with Forbes via email, stating, “We do not have any comments as the matter with BlockFi has been settled. Unfortunately, we are not able to comment due to confidentiality.”
Celsius and DHI: A Crypto Dance Between April and June 2022
Before the BlockFi incident, DHI was identified as an institutional customer of Celsius. The firm conducted multiple transactions between April and June 2022, involving deposits, withdrawals, and borrowing of Bitcoin, Ether, Tether, and several other cryptocurrencies.
The origin of these funds and their application by the officials remain unclear. However, DHI’s holdings could potentially lead to further legal action, as Celsius’s lawyers have expressed their intention to seek “clawbacks” of deposits made within 90 days of the company’s bankruptcy.
An Unusual Choice for Bhutan’s Sovereign Wealth Fund
DHI’s decision to invest tens of millions of dollars in cryptocurrencies appears peculiar, considering the holding company’s primary role in promoting domestic ventures. However, if DHI is a sovereign wealth fund, it would be the first to own crypto assets directly.
The royal charter, which established the fund in 2007, states that the purpose of DHI is “to safeguard the national wealth, and manage and enhance such wealth through prudent investments.” The secretive cryptocurrency investments, therefore, raise questions about whether these actions align with the charter’s objectives.
A Mysterious Crypto Affair Amidst Bhutan’s Modernization Efforts
The discovery of Bhutan’s clandestine cryptocurrency investments has spotlighted the nation’s relationship with the digital economy.
As the country continues to pursue modernization initiatives, the implications of these hidden investments and their alignment with the kingdom’s long-term goals remain to be seen.
The unfolding story of Bhutan’s secretive crypto portfolio is a fascinating example of how even the most isolated nations are getting entangled in the ever-evolving world of digital assets.
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