- The country of Bhutan appears to have owned tens of millions in cryptocurrencies, including BTC and ETH
- Bhutan’s public investment arm was a customer of BlockFi and Celsius
- Both bankrupt firms are seeking millions back from investment firm
The country of Bhutan owned tens of millions of dollars in bitcoin and ether, which would make it the first sovereign wealth fund to do so, according to Forbes. Reviewing court documents relating to the bankruptcies of lending firms BlockFi and Celsius, Forbes discovered that Bhutan’s sovereign investment manager, Druk Holding & Investments, was a customer of both entities and that it deposited, withdrew, and borrowed tens of millions of dollars in BTC, ETH, USDT and a selection of other cryptocurrencies in a three-month spell last year.
Bhutan Had Secret Crypto Portfolio
Druk Holding & Investments, which manages a collection of locally-owned assets including a cheese producer, multiple hydropower facilities, and Royal Bhutan Airlines, was named after Bhutan’s national emblem, the mythical thunder dragon. In 2007, King Jigme Khesar Namgyel Wangchuck established Druk through a royal charter to protect the country’s wealth for “the long-term benefit of its shareholders, the people of Bhutan.”
However, as Forbes discovered, Druk has been secretly building a crypto portfolio since at least 2022. The portfolio was revealed unintentionally during the fallout of last year’s crypto contagion crisis, which led to the collapse of several companies, including BlockFi and Celsius. Following its collapse in October last year, Celsius released a document that contained over 14,000 pages of user data, including account names, addresses, and transactions.
The records revealed that Druk Holding & Investments, as well as an account labeled the “Druk Project Fund,” had made numerous transactions between April and June 2022, such as depositing, withdrawing, and borrowing a combined $83 million during the three-month period. And this wasn’t all. BlockFi’s legal representatives recently served a complaint to Druk, accusing the fund of defaulting on a $30 million loan repayment. According to the claim, in February 2022, Druk agreed to borrow $30 million in USDC but defaulted on the loan, racking up debts of $76.5 million. Blockfi says that Druk “failed and refused” to pay the loan back in full, resulting in an outstanding balance of $820,000.
First Sovereign Fund to Own Crypto
Druk has failed to acknowledge the claims, but unless it engages it could find itself in more legal hot water as Celsius’ lawyers intend to seek “clawbacks” of deposits made within 90 days of its bankruptcy, into which holdings fall.
Assuming that the information in the filings is accurate it would represent the first time that a sovereign fund has directly owned cryptocurrencies, although clearly, this dipping of a toe into the water had a catastrophically bad ending.