If you thought Bhutan was all about Buddhism, landscapes, and staying on the outskirts of the modern economy, you might have got it wrong. Last year, the country invested millions in crypto, buying up Bitcoin, Ether, and other currencies via Druk Holding & Investments (DHI), its $2.9 billion investment arm. According to court documents reviewed by Forbes, DHI was a customer of crypto lenders BlockFi and Celsius, both of which filed for Chapter 11 bankruptcy last year.
The company has been secretly developing its cryptocurrency portfolio since at least 2022. Its activity in the crypto market was disclosed amid the turmoil caused by the FTX failure, followed by other crypto companies going bust. Allegedly, before filing for bankruptcy, BlockFi lawyers served a complaint to DHI accusing the fund of failing to pay back a 30 million USD coin loan. DIH's CEO told Forbes the matter has already been settled and declined any further comment due to confidentiality reasons.
In February, the fund was outed as a customer of Celsius. The latter company released a document containing over 14,000 pages of data with account names and transactions. The records show that DIH made numerous trades in the second quarter of 2022, including borrowing, depositing, and withdrawing Bitcoin, Ether, and Tether, along with several other cryptocurrencies. Assets withdrawn in the period covered by the document exceeded $65 million. Deposits amounted to nearly $18 million.
Bhutan, with a population of about 720 thousand and a total GDP of $9.8 billion, is one of the smallest countries and economies in the world. It's also one of the most isolated and "exclusive" due to its "high value, low impact tourism" policy. The country charges an admission fee of $200 US per person per night in the low season and $250 in the high season. Bhutan opened to the outside world in the 1970s and boasts unspoiled nature to this day.
DIH's investment in crypto comes as a bit surprising since, according to the royal charter that established the fund in 2007, the purpose of the enterprise is "to safeguard the national wealth, and manage and enhance such wealth through prudent investments." It's debatable whether investing in crypto fits these criteria.