Bhutan’s Secret Multi-Million Dollar Crypto Investment

Bhutan, a small landlocked country located in the eastern Himalayas, is often referred to as the “last Shangri-La”. It is known for its stunning natural beauty, commitment to environmental conservation, and unique approach to measuring progress through its Gross National Happiness (GNH) index.

Despite being one of the poorest countries in the world, Bhutan has made impressive strides in terms of economic growth and development in recent years.

As of 2021, Bhutan’s GDP per capita stands at around $3,900, a significant increase from the $1,400 recorded in 2005.

While still considered a low-income country, Bhutan’s economy has been growing steadily over the past decade, largely due to its hydropower industry, which exports electricity to neighboring countries like India. In addition to hydropower, Bhutan’s economy also relies on agriculture, forestry, and tourism.

One of the most impressive things about Bhutan is its commitment to environmental conservation. The country is one of the 3 “carbon-negative” countries along with Suriname and Panama – countries that absorb more carbon dioxide than they emit.

Bhutan achieves this through its vast forests, which cover over 70% of the country’s land area. The government has implemented policies to preserve these forests, which serve as a carbon sink and provide important habitat for wildlife.

Bhutan’s “secret” multi-million dollar investment in cryptocurrencies

In this Forbes article, Bhutan had secretly invested millions of dollars in cryptocurrencies.

Bhutan’s $2.9 billion sovereign investment arm, Druk Holding & Investments, was a customer of bankrupt crypto lenders BlockFi and Celsius.

Just to put this into context, BlockFi and Celsius are two cryptocurrency lending platforms that allowed customers to lend or borrow digital assets, as well as earn interest on their crypto holdings and found their demise in the last year.

In March 2022, BlockFi was hit with a cease and desist order from the Texas State Securities Board for allegedly selling unregistered securities. Then, later that year, Celsius faced a class-action lawsuit from customers who accused the company of misleading investors and breaching its fiduciary duty.

That’s when things started to unravel for Buthan’s Druk Holding. 

BlockFi accused Druk of defaulting on its repayment of a $30 million loan in USDC stablecoin, which it agreed to borrow in February 2022. BlockFi alleged that Druk failed and refused to repay the loan in full, even after the lender liquidated collateral worth $76.5 million at the time of the loan, leaving an unpaid balance of $820,000.

Ujjwal Deep Dahal, CEO of Druk, declined to comment on the matter and its crypto holdings, stating that the issue with BlockFi has been settled and he could not comment due to confidentiality.

Druk was also revealed to be an institutional customer of Celsius, making scores of trades between April and June 2022, withdrawing more than $65 million, and depositing nearly $18 million in digital assets. Druk declined to comment on the origin and use of these funds.

Druk’s tens of millions of dollars’ investment in crypto marks a strange move for a holding company meant to promote domestic ventures, and if it is indeed a sovereign wealth fund, it would appear to be the first to directly own crypto.

Main photo: A group of male dancers get ready for a traditional item during Thimphu Tshechu (festival). Photo by Pema Gyamtsho on Unsplash

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