A California cryptocurrency custodian valued at more than a billion dollars is packing up its headquarters and heading for the Great Plains just as a fight over taxing extreme wealth erupts in Sacramento. The relocation of BitGo from Silicon Valley to South Dakota crystallizes a broader clash between states that want to aggressively tax fortunes and those that are courting digital asset firms with lighter-touch rules. It is a test of whether a proposed wealth tax can coexist with a mobile, code-based industry that can move its core operations with a board vote and a few signed leases.
BitGo’s break with California
BitGo, a crypto custody and infrastructure company that has long called California home, is shifting its headquarters to Sioux Falls after years of building its brand in the state’s tech ecosystem. The firm, which has been valued at around $1.75 billion, is moving its official base even as it prepares for an initial public offering and fields questions about how a regulated financial business fits inside a volatile digital asset market. In regulatory filings with the U.S. Securities and Exchan authorities, BitGo has already described the move to South Dakota as part of its positioning ahead of an IPO, signaling that the decision is not a symbolic protest but a material change in how it wants to present itself to investors and watchdogs, according to South Dakota.
The company’s chief executive has not been shy about linking the relocation to California’s political climate, especially the push for a new levy on the state’s richest residents. Reporting on the move has highlighted how BitGo’s leadership has repeatedly criticized Governor Gavin Newsom’s allies for backing a ballot initiative that would impose a new tax on billionaires and ultra-high-net-worth households. In coverage of the shift to Sioux Falls, Stephen Council detailed how the firm’s CEO publicly derided the wealth tax proposal and framed the headquarters change as a direct response to Sacramento’s direction, casting the decision as a warning shot from a $1.75 billion crypto company that can simply leave, as described by Stephen Council.
The Billionaires Tax Act flashpoint
At the center of the political storm is the Billionaires Tax Act, a proposed ballot measure that would target the state’s wealthiest residents rather than just their annual income. Supporters want to tax large fortunes held by a relatively small number of Californians, arguing that the state’s budget and social programs should be backed by those who have benefited most from its innovation economy. The measure is still in the signature-gathering phase and has not yet qualified for the ballot, but its backers are already pitching it as a way to stabilize revenue and reduce inequality by imposing a new obligation on billionaires and other ultra-rich households, a push that has been described in detail in coverage of the ballot measure.
Critics, including BitGo’s leadership, see something very different: a signal that California is willing to experiment with aggressive taxation even if it risks driving away mobile capital and high-growth firms. The company’s move has become a talking point for opponents who argue that the Billionaires Tax Act would accelerate an exodus of founders, investors, and the companies they control. Reporting on the wealth tax debate notes that the initiative is still far from becoming law, yet it has already influenced corporate decisions and public messaging, with BitGo’s relocation cited as an early example of how a proposed levy on billionaires can ripple through a broader ecosystem of startups and financial intermediaries, as outlined in coverage of California.
Why South Dakota looks like crypto’s safe harbor
BitGo’s choice of Sioux Falls is not random, and it is not just about escaping a potential wealth tax. South Dakota has spent years building a reputation as a friendly jurisdiction for financial services, particularly trust companies and custodians that manage assets for clients around the world. State regulators have clarified how virtual currency businesses fit into existing money transmission rules, defining virtual currency to include crypto assets like Bitcoin and spelling out when a firm that moves digital value within or outside the United States must obtain a license. In a key guidance document, the Division of Banking explains that virtual currency transmission is treated similarly to other forms of money transfer, which gives companies a clearer compliance roadmap than in states where the rules are still being debated, as laid out in the state’s framework for virtual currency…