Ripple Co-Founder Heads $40M Effort Against California Wealth Tax

Chris Larsen, co-founder of Ripple, along with venture capitalist Tim Draper, has initiated Grow California, a political endeavor with a budget of $40 million aimed at electing moderate state legislators and countering the influence of labor unions, with a proposed wealth tax acting as the main impetus for Silicon Valley’s latest political activism.

As reported by NYT, this initiative, which started with contributions of $5 million from each founder in September, signifies one of the most substantial financial investments from the technology and cryptocurrency industries to alter the political landscape in California.

The ballot initiative that spurred this action, supported by the Service Employees International Union-United Healthcare Workers West, seeks to establish a one-time 5% tax on net worth surpassing $1 billion, inclusive of unrealized gains on assets that have not yet been sold.

“The designers of that wealth tax within the unions — wow,” Larsen remarked. “They have awakened a giant like I have never witnessed before.“

Ripple co-founder Chris Larsen. | Source: Bloomberg

Tech Billionaires Take on Union Power with Business-Friendly Candidates

Larsen, whose wealth is nearly $15 billion derived from Ripple assets and cryptocurrency investments, mentioned that he anticipates personally contributing $30 million to the initiative.

“If it requires a few cycles, that’s fine — that’s our purpose,” he told The New York Times when queried about possible losses in November.

The organization aims to focus on approximately a dozen state legislative positions this year, emphasizing public safety, homelessness, and fiscal responsibility, as per Shaudi Fulp, the former Sacramento lobbyist managing day-to-day activities.

Despite Democrats holding over two-thirds of the seats in both legislative chambers, Grow California will refrain from participating in the 2026 gubernatorial election or costly ballot measure campaigns.

Both founders have backgrounds in the cryptocurrency sector, though they clarify that the initiative does not specifically represent the interests of that industry.

Larsen acknowledged having gained insights from Fairshake, the cryptocurrency super PAC backed by Ripple that invested over $100 million to influence the current Congress.

Draper, recognized for his Bitcoin-themed merchandise and his ongoing campaign to partition California into multiple states, did not respond to requests for comment.

“Government unions perform admirably,” Larsen stated, adding with amusement, “I respect the work they’ve accomplished. They are present and consistent. However, that will conflict with many elements necessary for California’s success without a counterbalance.“

Leaders in crypto and technology caution that California’s proposed 5% tax on unrealized gains for billionaires might lead to capital flight and a departure of high-net-worth individuals prior to the 2026 ballot vote.#CaliforniaTax #CryptoBillionaires https://t.co/Sl1SR9z6Gw

— Cryptonews.com (@cryptonews) December 29, 2025

Heightened Crypto Politics in California Amid Governor Race and Regulatory Growth

The discussion surrounding the wealth tax coincides with former Assembly member Ian Calderon’s candidacy for the 2026 gubernatorial race on a pro-Bitcoin agenda.

Calderon, 39, who held the position of Assembly Majority Leader from 2016 to 2020, expressed his ambition for California to become “the undisputed leader in Bitcoin” during his campaign announcement video.

In the meantime, Governor Gavin Newsom has ramped up his criticism of President Donald Trump’s crypto-related pardons, launching a state-supported website that tracks what his office refers to as “criminal cronies.“

The website prominently features Binance founder Changpeng Zhao, who was granted a full pardon in October after spending four months for violations of the Bank Secrecy Act, as well as Ross Ulbricht, whose life sentence for operating Silk Road was commuted.

California Governor Newsom criticizes Trump’s crypto pardons, labeling @binance’s CZ and Silk Road’s Ross Ulbricht as “criminal cronies” in a new state tracker that highlights controversial pardons.#GavinNewsom #TrumpPardons https://t.co/j9Sac1g4Th

— Cryptonews.com (@cryptonews) December 17, 2025

Aside from political confrontations, California continues to enhance its digital asset framework through the Digital Financial Assets Law, which comes into effect in July 2025 and mandates that all cryptocurrency service providers obtain state licenses.

The Assembly also unanimously passed AB 1180 in June, establishing a pilot program for state fee payments using digital assets that will operate until 2031.

Global Tax Frameworks Contrast with California’s Uncertain Path

While California deliberates on wealth taxation, other regions are establishing clearer tax regulations for cryptocurrencies.

Japan’s 2026 tax reform proposal aims to lower cryptocurrency tax rates from as high as 55% to a flat 20% for designated digital assets managed by registered firms, although the precise qualifying criteria are yet to be defined.

Similarly, the European Union’s DAC8 tax transparency regulation took effect on January 1, requiring cryptocurrency exchanges and service providers to gather and report user information to national tax authorities, with data sharing among EU nations commencing on July 1.

“Tax authorities now possess an automated dashboard to monitor your digital assets,” stated Bitcoin educator Heidi Chakos.

DAC8 commenced on January 1, empowering the EU to seize cryptocurrency linked to unpaid taxes while eliminating privacy for individual holders.#Crypto #Tax #DAC8 #EU https://t.co/JWKHNvbA3C

— Cryptonews.com (@cryptonews) January 19, 2026

Nevertheless, akin to California, South Korea is experiencing increasing uncertainty regarding its repeatedly delayed cryptocurrency tax system, now slated for January 2027 despite lacking crucial infrastructure.

Switzerland has also postponed the automatic exchange of cryptocurrency account data with international tax authorities until at least 2027, although legal frameworks will come into effect in January 2026.

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