California’s Proposed Wealth Tax Sparks Exodus Fears Among Crypto Leaders

California's controversial wealth tax proposal is drawing sharp criticism from cryptocurrency executives, who warn it could trigger a capital flight from the state. The measure would impose levies on unrealized gains, potentially forcing billionaires to liquidate assets or company stakes to meet tax obligations. Payment options would include either immediate settlement or a five-year installment plan with interest.

Bitwise CEO Hunter Horsley and Kraken co-founder Jesse Powell lead the industry's opposition, arguing the tax would disproportionately target tech and crypto entrepreneurs. "Many who've made this state great are quietly discussing leaving," Horsley cautioned in a social media post. Powell was more blunt, calling the proposal "the final straw" that would drive away billionaires along with their investments and philanthropic activities.

The debate highlights growing tensions between progressive taxation policies and the mobile nature of crypto wealth. Venture capitalist Chamath Palihapitiya notes the measure could stifle innovation by creating liquidity crises for founders holding illiquid assets. Meanwhile, labor unions maintain the tax could generate $100 billion to offset federal budget cuts.