An unknown country that secretly invests in Bitcoin and digital currencies; A land without pedestrian lights!

Kingdom of Bhutan; A small, unknown country in South Asia that has quietly invested millions of dollars of its wealth in digital currencies. These previously undisclosed large investments were revealed during the bankruptcy filing of the BlockFi and Celsius platforms.

The article you read below is based on a report Written from the Forbes website.

Bhutan is one of the most isolated countries in the world, known mainly for its natural landscapes, mountaintop monasteries and its good gross happiness index, which shows that comfort has been prioritized over economic growth in this country. Bhutan’s economy is largely based on agriculture and forestry, and for example, the infrastructure related to mobile phone networks has only been provided in this country for two decades, and more interestingly, there is no such thing as a pedestrian light in this country. All in all, with very little technology penetration in this country, it is hard to imagine a connection between Bhutan and digital currencies.

But surprisingly, Bhutan has invested several million dollars of its wealth in Bitcoin, Ethereum and other digital currencies over the past year.

According to court documents reviewed by Forbes, the Bhutanese government-linked investment complex with a fortune of $2.9 billion was one of the clients of bankrupt lending platforms BlockFi and Celsius; A connection that has never been revealed before.

This company, called Druk Holding & Investments, manages a collection of Bhutanese national assets; Assets such as a local cheese factory, several hydroelectric plants, as well as Royal Bhutan Airlines, which has only 5 planes in total.

Druk Holding was established in 2007 and its goal is to “protect the wealth of this country to benefit the people of Bhutan in the long term”. Although employees, partners and even Druk Holdings itself have described the group as a sovereign wealth fund, Druk operates more like a state-owned business and currently oversees the operations of 21 domestic companies in Bhutan.

Now the evidence shows that Druk has also created an investment portfolio in digital currencies since at least 2022; A secretive move that was unwittingly revealed during the collapse of major conglomerates active in the digital currency industry.

Last month, a lawyer for the blockchain platform, which filed for bankruptcy just days after cryptocurrency exchange FTX filed for bankruptcy in November, filed a lawsuit against Druk Holdings. At that time, BlockFi accused the fund of not paying a 30 million dollar loan. Blockfi’s legal team claimed that Druk borrowed 30 million USD Coin (USDC) from them in February 2022 (Bahman 1400), but refused to fully repay this loan; Even after the lending platform cashed out their 1,888 Bitcoin collateral, which was worth $76.5 million at the time of the loan payment.

Ujjwal Deep Dahal, CEO of Druk Group, said in response to questions from Forbes:

I don’t have any comment about the BlockFi issue because this issue has been resolved. Due to confidentiality, we are unable to comment.

Druk’s CEO also answered some of Forbes’ questions, including why the holding company needs the $30 million in USD coins claimed by BlockFi, whether “resolving” this issue means repaying the loan, and how the company’s digital currency assets were acquired. He has not responded.

On the other hand, BlockFi’s lawyer has not responded to Forbes’ repeated requests for comment in this regard, and the details of the loan agreement paid to Druk are still unclear.

A few months before the flow of BlockFi, however, the name of Druk Holding was mentioned as one of Celsius’ clients; One of the largest active lending platforms in the digital currency space that declared bankruptcy in July last year. In October, Celsius released a 14,000-page file containing information about its customers, including account names, addresses and transactions.

This file showed that Druk Holding and a user account under the name “Druk Project Fund” between April and June 2022 (April to June 1401) carried out activities such as depositing, withdrawing and borrowing Bitcoin, Ethereum, Tether and several other digital currencies. . In these three months mentioned in the Celsius case, Druk has withdrawn a total of 65 million dollars and deposited 18 million dollars. Druk’s representatives also refused to comment on the Celsius incident.

Is Bhutan the only secretive state in the digital currency market?

State holding Druk’s multi-ten million dollar investments in digital currencies seem contradictory for an institution whose purpose is to promote investment in the domestic sector.

Investment experts have been talking about the possibility of sovereign wealth funds investing in digital currencies for several years. Duncan Bonfield, executive director of the International Forum of Sovereign Wealth Funds, says that the link between governments and digital currencies will only become clear when these funds buy shares of companies active in the field of digital currencies.

For example, Norway’s state pension fund, as the largest sovereign wealth fund in the world, is a shareholder of Microstrategy, which is one of the largest holders of Bitcoin. Singapore’s $403 billion Temasek fund has also been rumored to have invested in digital currencies, but its representatives denied these claims last year.

Bonfield also said:

Yet [بین صندوق‌های حکومتی] We have not seen any real interest in investing in cryptocurrencies as an asset class, and we do not believe that any of our panel members have allocated any portion of their portfolio to cryptocurrencies.

The history of Bhutan’s activities in the space of digital currencies goes beyond Celsius and Blockchain. In 2020, Druk Holding hosted a panel with the presence of blockchain fans, and its purpose was to increase people’s awareness of this space, as well as the possible attraction of industry activists through education and investment in the coming years. A year after this incident, Ripple announced that it is working with the Central Bank of Bhutan to launch the country’s national digital currency on the platform of the “XRP ledger” network.

It should be noted that neither Druk Holdings nor Ripple did not respond to Forbes’ questions about the country’s national digital currency pilot program and whether this plan will continue or not.