Bhutan’s Sovereign Fund Defaulted on BlockFi Debt, According to Report

A new report by Forbes found that a sovereign investment arm of the Kingdom of Bhutan held tens of millions of dollars in cryptocurrencies without previously disclosing it to the public. In addition, the fund borrowed $30 million from BlockFi, which the crypto lender claims it has failed to return.

DHI Claims it has “Settled” the $30M BlockFi Loan

The Kingdom of Bhutan has been secretly investing millions of dollars in cryptocurrencies through its sovereign investment fund, according to a report by Forbes. The fund, Druk Holding and Investments (DHI), is estimated to have around $2.9 billion in assets under management and was a client of collapsed crypto lenders BlockFi and Celsius Network.

Forbes reports that Celsius’s bankruptcy filing revealed that DHI withdrew over $65 million and injected $18 million into cryptocurrencies. BlockFi attorneys then handed a complaint to DHI, accusing them of defaulting on the lender’s $30 million loan. BlockFi filed for bankruptcy in November, just a few days after the FTX collapse.

“The claim noted that in February 2022, Druk agreed to borrow 30 million USD Coin, a stablecoin pegged 1:1 to the U.S. dollar. However, BlockFi alleged that Druk “failed and refused” to repay the loan in full, even after the lender liquidated a collateral of 1,888 bitcoin (worth $76.5 million at the time of the loan), leaving an unpaid balance of $820,000.”

– says the Forbes report.

However, DHI CEO Ujjwal Deep Dahal told Forbes the fund’s matter with BlockFi “has been settled.” But Dahal did not answer other questions, including why the fund needed a 30 million loan and whether “settled” means that DHI paid back the loan.

DHI’s Crypto Investments Disclosed to the Public for the First Time

While BlockFi’s and Celsius’s bankruptcy filing revealed DHI’s crypto holdings, these investments had never been disclosed to the general public before the Forbes report. The fund was established in 2007 to protect the country’s wealth and bring long-term value to its shareholders, the people of Bhutan.

A few months after its collapse, crypto lender Celsius published more than 14,000 user information pages, such as names, addresses, and financial activities. The document shows that from April 2022 to June 2022, DHI and an account named “Druk Project Fund” executed dozens of crypto transactions, including deposits, withdrawals, and borrowing of Bitcoin, Ether, and Tether, among other cryptocurrencies.

These revelations raise numerous questions, such as why DHI invested tens of millions of dollars in crypto, given that it is a sovereign investment arm established to support local business projects. If DHI is genuinely what it claims to be, a sovereign wealth fund, “it would appear to be the first to directly own crypto,” says the Forbes report.

This article originally appeared on The Tokenist