Sources: Huobi partnered with Dominica and prompts new Chinese users to apply for a Dominican digital citizenship to evade China's crypto trading restrictions
through a digital citizenship program from a tiny Caribbean island. Story with @soonweilun https://www.wsj.com/... Jonathan Cheng / @jchengwsj : “He often uses the title ‘His Excellency,’ or H.E., when referring to himself, and his website describes him as a Chinese-Grenadian diplomat.” @soonweilun @yuenok https://www.wsj.com/... @wsj : Crypto entrepreneur Justin Sun's strategy for boosting digital-assets exchange Huobi's revenue includes a novel way around Beijing's trading restrictions https://www.wsj.com/...
Context & Ripple Effects
Huobi has spent years building an offshore, partner-driven footprint — the Huobi Cloud exchange partnerships across five jurisdictions date back to 2018 — and Justin Sun's takeover-era strategy now extends that playbook into state-issued identity itself. Per the WSJ reporting, the exchange is steering new mainland users toward Dominican digital citizenship so they can onboard despite Beijing's trading restrictions.
The move lands amid mounting questions about Huobi's China exposure and controls: Binance walked away from buying Justin Sun's Huobi stake over alleged ties to China, and Inca Digital found Huobi and KuCoin still processing transactions from debit cards issued by sanctioned Russian banks on their P2P desks. A citizenship-for-onboarding scheme sharpens both concerns.
First-order effects
- New Chinese users get a documented on-ramp past Beijing's trading ban — Dominican digital citizenship becomes the KYC-compliant-looking wrapper for restricted accounts — directly feeding Huobi's user growth and revenue under Sun's strategy.
- Justin Sun's own profile grows more fraught: the WSJ notes his 'His Excellency' diplomat branding, and a citizenship-funnel story attaches to an exchange whose ownership he keeps deliberately opaque.
Second-order effects
- Rivals face a fork: copy the small-state identity workaround or differentiate on clean compliance — KuCoin, also Seychelles-domiciled per the Inca Digital findings, sits closest to whichever path Huobi normalizes.
- Western counterparties and payment rails gain a concrete reason to treat Huobi as elevated-risk, extending the pattern where alleged China ties have already cost it deals like Binance's aborted purchase.
Third-order effects
- If the pattern holds, microstates' digital-citizenship programs become routine infrastructure for jurisdictional arbitrage around capital controls, forcing regulators to police identity issuance rather than just trading venues.
- For Beijing, the episode shows its crypto crackdown pushing activity not underground but into formally licensed offshore shells — pressure toward extraterritorial enforcement or harsher domestic penalties rather than simple bans.
The trend: Chinese crypto demand is migrating through layered offshore structures — VPNs, shell companies, P2P desks, and now purchased national identities — turning small-state programs into load-bearing parts of the evasion economy.