California Wealth Tax Threatens Crypto Billionaire Exodus to Tax-Haven States

California's proposed wealth tax legislation is rattling Silicon Valley and the global crypto industry, with Web3 founders and blockchain startups weighing relocations to tax-friendly states like Texas and Florida. The bill targets ultra-high-net-worth individuals, including a contentious provision to levy taxes on unrealized gains—a MOVE that could force crypto entrepreneurs to liquidate illiquid token holdings.

For blockchain founders, whose wealth is often tied up in long-term protocol holdings rather than cash, the tax poses unique challenges. Many are 'paper billionaires' with token allocations that can't be easily converted to fiat without disrupting markets. Forced sales could destabilize token prices and damage ecosystem growth.

The policy may also stifle innovation by complicating treasury management for startups and reducing angel investment capacity. Once a magnet for tech talent, California risks losing its edge as crypto builders eye low-tax jurisdictions.