Himalayan kingdoms are quietly pouring millions of dollars into Bitcoin and other cryptocurrencies. That investment, which has never been publicly disclosed, came to light in the bankruptcy filings of lenders BlockFi and Celsius.
To Ian Martin and Sarah EmersonForbes Staff
aAmong the world’s most isolated countries, Bhutan is known for its vast landscapes, mountaintop monasteries and Gross National Happiness Index that prioritizes well-being over economic growth. Given an economy largely based on agriculture and forestry, and an infrastructure that started supporting mobile phones just 20 years ago (the traffic light is still on the horizon), it’s reminiscent of the boom and bust of cryptocurrencies. There are very few places. Yet, over the past year, the “happiest country in the world” has quietly dumped millions of dollars into Bitcoin, Ethereum, and other digital assets.
According to court documents confirmed by forbesBhutan’s $2.9 billion sovereign investment sector is a client of bankrupt cryptocurrency lenders BlockFi and Celsius, which has not been made public.
Named after the mythical thunder dragon, the national symbol of Bhutan, Druk Holding & Investments has grown in the country, including a local cheesemaker, several hydroelectric power plants and Royal Bhutan Airlines, which boasts a total of five aircraft. manages a portfolio of assets. When Druk was founded in his 2007 royal charter From King Jigme Khesar Namgyel Wangchuck, it was to protect the nation’s wealth for the “long-term interests of the Bhutanese people as shareholders.” Druk employees, partners and the company itself It describes it as a sovereign wealth fund, even though it operates like a state-owned enterprise. It currently oversees 21 domestic companies.
But since at least 2022, Druk has also built a secret cryptocurrency portfolio. It was inadvertently exposed amid the aftermath of last year’s crypto epidemic, which saw the bankruptcies of many companies, including FTX and another major lender, Voyager. It is unclear if it is related to biodiversity initiatives (such as biometric digital identity platforms). first user I was a 7 year old prince. But that disclosure raises questions about the secluded country’s relationship with the tumultuous crypto economy.
In the three months shown in Celsius filings, Druk withdrew over $65 million and deposited nearly $18 million in digital assets.
Last month, BlockFi’s lawyers, who filed for bankruptcy in November just days after FTX, filed a complaint against Druk in Thimphu, Bhutan’s capital and home of the royal family. BlockFi accuses the fund of failing to repay his $30 million loan. The claim points out that in February 2022 he agreed to borrow Druk his USD 30 million coin. However, BlockFi claims Druk “failed and refused” to pay back the loan in full, even after the lender liquidated his 1,888 bitcoin collateral (which he was worth $76.5 million at the time of the loan). We left an outstanding balance of $820,000.
“The BlockFi issue has been resolved, so I have no comment. Due to confidentiality, I cannot comment,” Druk CEO Ujjwal Deep Dahal said. forbes on mail. Dahal was asked a series of questions about why Druk needed his 30 million USDC, whether “settled” meant the loan was repaid, and how the crypto holdings were acquired. didn’t answer.
BlockFi’s attorneys did not respond to repeated requests for comment, and the loan deal with Druk remains sealed. So far, his Druk appears to be the only target for attempts to recover outstanding assets.
A few months ago, Druk was also ousted as an institutional investor in Celsius, one of the world’s largest cryptocurrency lenders. Celsius filed for Chapter 11 in July, blaming poor investment and market declines. In October, Celsius document It contained over 14,000 pages of user data, including account names, addresses and transactions. These records are owned by Druk Holding & Investments andDruk Project Fund,” made numerous transactions between April and June 2022, depositing, withdrawing, and borrowing Bitcoin, Ether, Tether, and several other cryptocurrencies. In his three months, shown in Celsius filings, Druk withdrew more than $65 million of his and deposited nearly $18 million in digital assets.
Druk declined to comment on the origin and use of these funds.As the lawyers of Celsius have pointed out their intentions Druk’s holdings could lead to further litigation if seeking a “clawback” on deposits made within 90 days of bankruptcy.
If It Really Is A Sovereign Wealth Fund, It Will Look Like The First To Own Crypto Directly
Dork’s investment of tens of millions of dollars in cryptocurrencies would mark a strange move for a holding company meant to foster domestic ventures. It will be the first company to own.
Wealth managers have speculated for years that government-backed funds are starting to buy into cryptocurrencies. Duncan Bonfield, CEO of the Sovereign Wealth Funds International Forum, currently only reveals relevance when these funds buy shares in companies that own cryptocurrencies. For example, the world’s largest sovereign wealth fund, the Norwegian Government Pension Fund, is a shareholder of business intelligence company MicroStrategy. incidental possession 600 Bitcoins as of 2020. denied the allegations last year.
“We haven’t seen any real interest in cryptocurrencies as an asset class, and we don’t believe any members are allocating cryptocurrencies to their portfolios,” Bonfield said. forbes.
Sandwiched between China, Nepal and India, the Kingdom of Bhutan only opened its borders to foreigners in 1974 in an attempt to grow its economy through high-end tourism. Before Bhutan temporarily banned foreign tourists as a result of the pandemic, tourism had become one of his most lucrative exports alongside hydropower and agriculture. A series of open-ended partnerships also suggest the country has made similar gains in cryptocurrencies.
Druk in 2020 hosted a panel blockchain proponents claim it will “increase knowledge among local stakeholders” and “could attract the industry through education and investment in the coming years.” One year later, the virtual currency exchange Ripple announced It was working with Bhutan to pilot a “central bank digital currency” built on its own XRP ledger. (Ripple is filed a lawsuit With the U.S. Securities and Exchange Commission for allegedly selling unregistered securities since 2020. Said It intends to combat what are called “attacks” on cryptography. ) Shortly after that, Bhutan began experimenting NFT art and issued carbon credit on the blockchain.
Neither Druk nor Ripple responded to questions about a digital currency pilot program and whether it was in progress. InfraBlocks Technologies, a Singaporean technology company hired to help Bhutan develop a tokenized carbon credit platform, said the project will launch commercially later this year. Shubhomoy Ray, Managing Partner and CEO of Infrablocks, said:
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