California-based crypto firm BitGo has relocated its headquarters from Palo Alto to South Dakota as it prepares for its initial public offering, to avoid the state’s proposed 5% billionaires tax on high-net-worth individuals.
BitGo declared in its December filings with the U.S. Securities and Exchange Commission about the shift and is now officially based in South Dakota’s largest city, Sioux Falls. BitGo will keep its Palo Alto location and has offices in San Francisco, New York, Canada, India, Germany, Singapore, South Korea, and Dubai.
BitGo moves its headquarters due to California’s Billionaire Tax Act
The company did not reveal in its U.S. SEC filings in December why it had moved its headquarters. However, Mike Belshe, BitGo’s CEO, has repeatedly criticized Gavin Newsom, the Governor of California, for allegedly pioneering poor leadership in the state.
On November 29, the executive likened the governor to the real-life President Coriolanus Snow from The Hunger Games. In another X post dated June 2022, Belshe said that Governor Newsom was “doing to California what he did to San Francisco,” emphasizing that he “ruined” it.
A proposal to tax billionaires at 5% on their wealth to fund healthcare has sparked widespread discussion and heavy backlash since its introduction. Under the Billionaire Tax Act, Californians worth more than $1 billion would pay a one-time 5% tax on their total wealth. The state will then allocate most of the funding to the healthcare sector to offset widespread cuts initiated by the Trump administration.
In a more recent post, Belshe referenced the proposed bill, saying California was kneecapping all future businesses to get a slight tax increase. He then added, “Who in their right mind would found a new business in California if California does this?”
Some technology leaders in the tech sector, such as Google co-founders Larry Page and Sergey Brin, have already moved some of their companies outside California. Elon Musk also moved Tesla, X, and xAI’s headquarters outside California’s jurisdiction, citing an unfavorable business environment, regulations, and taxes as the main reasons.
Previously, Cryptopolitan reported that California Attorney General Rob Bonta demanded that xAI halt the Generation of inappropriate Grok images via a cease-and-desist letter.
California’s 2026 Billionaire Tax Act to collect $100 billion from 200 billionaires
Critics argue that the 2026 Billionaire Tax Act could drive away California’s high-net-worth residents, reducing future tax revenues and negatively impacting the state’s economic health. The proposal aims to collect $100 billion from about 200 California billionaires who reside in the state as of January 1.
Still, it raises legal concerns, including those under the Uniformity Clause of the California Constitution and the Dormant Commerce Clause. Mike Belshe believes the Billionaire Tax Act could deter entrepreneurs from starting businesses in the state.
The bill has also received support amid growing backlash. Supporters argue that it is critical to raise enough funds to stabilize critical state services, especially in light of federal budget cuts. Others support the bill because they believe anything a billionaire complains about is good for humanity.
Massachusetts introduced a similar bill that mandates that personal income taxpayers pay an additional 4% surtax on taxable income over $1 billion for the tax year 2023. The state has already raised significant revenue and could be a determining factor in whether such measures work in other states. The proposal still needs enough signatures to qualify for the November ballot.
A previous Cryptopolitan report highlighted that BitGo’s upcoming IPO aims to issue 11.8 million Class A common shares to early investors at around $15 to $17 per share and will take place at the New York Stock Exchange under the ticker symbol “BTGO .” The company aims to offer institutional clients a digital asset infrastructure for securely storing, managing, using, and creating digital assets.
