Latest: Crypto Rich Threaten To Leave California After New Tax: Is It A Bluff?

Crypto billionaires in California are threatening to leave the state, but are they ready to make good on their promise, or is an impending wealth exodus more of a paper tiger?

Crypto billionaires are threatening to leave the state of California after a prominent trade union proposed a 5% assets tax on residents worth more than $1 billion.

The Service Employees International Union-United Healthcare Workers West proposed the new tax back in November 2025. The trade union suggested that the new tax would bring in up to $100 billion from 200 state residents, more than making up for federal funding cuts to California’s state healthcare program. The measure will require 850,000 signatures before it can be put on the ballot for a popular vote in the 2026 elections in November.

Prominent investors and billionaires based in California, such as PayPal co-founder Peter Thiel and Google co-founder Larry Page, have already threatened to leave. Others have argued that a billionaire exit could remove crucial sources of tax revenue for the state.

However, the uber-rich threatening to leave due to taxes is not a new phenomenon, and past experience suggests that the threats of exodus from crypto riches may be a bluff.

The union filed its proposal on Nov. 26. In addition to the 5% tax, it would also impose a one-time tax of $1 billion on state residents worth over $20 billion. The levy on wealth, rather than income, would constitute a tax on unrealized gains.

Prominent members of the crypto industry, as well as the tech and venture capital sectors present in California, are now up in arms.

Jesse Powell, co-founder and chairman of cryptocurrency exchange Kraken, called the measure a “theft,” stating that the tax “will be the final straw. Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”

Bitwise CEO Hunter Horsley said, “Many who’ve made this state great are quietly discussing leaving or have decided to leave in the next 12 months.” He said that billionaires will likely follow a supposedly growing trend of “people voting their views not with the ballot box” and relocate to other jurisdictions.

Chamath Palihapitiya, a former Facebook executive and prominent venture capital investor, claimed that people with a collective net worth of $500 billion had already fled the state. “They took no risk because of the proposed asset seizure tax - introduced as a ‘Billionaire Tax.’”

Source: CoinTelegraph