Ripple co-founder Chris Larsen and venture capitalist Tim Draper have launched Grow California, a $40 million political initiative designed to elect moderate state legislators and push back against labor unions, with a proposed wealth tax serving as the primary catalyst for Silicon Valley’s latest political mobilization.
According to NYT, the effort, which began with $5 million checks from each founder in September, represents one of the most significant financial commitments from the tech and crypto sectors to reshape California politics.
The ballot measure that triggered this response, backed by Service Employees International Union-United Healthcare Workers West, would impose a one-time 5% tax on net worth exceeding $1 billion, including unrealized gains on assets not yet sold.
“Whoever designed that wealth tax in the unions — wow,” Larsen said. “They woke up the sleeping giant like I have never seen.”
Larsen, whose net worth is nearly $15 billion from Ripple holdings and crypto assets, said he expects to personally commit $30 million to the organization.
“If it takes a couple of cycles, fine — that’s what we’re here for,” he told The New York Times when asked about potential November losses.
The group plans to target about a dozen state legislative seats this year, focusing on public safety, homelessness, and budget discipline, according to Shaudi Fulp, the former Sacramento lobbyist leading daily operations.
While Democrats control more than two-thirds of seats in both legislative chambers, Grow California will not engage in the 2026 gubernatorial race or expensive ballot proposition campaigns.
Both founders come from the crypto industry, though they stress that the initiative does not represent the interests of the crypto sector specifically.
Larsen acknowledged learning lessons from Fairshake, the crypto super PAC backed by Ripple that spent over $100 million shaping the current Congress.
Draper, known for Bitcoin-themed accessories and his persistent campaign to split California into multiple states, did not respond to requests for comment.
“The government unions do a great job,” Larsen said, adding with a laugh, “I have respect for the job that they’ve done. They show up, and they’re there consistently. But that’s going to clash with a lot of the things that are going to make California successful if there’s no counterforce.”
The wealth tax debate coincides with former Assembly member Ian Calderon’s entry into the 2026 gubernatorial race on a pro-Bitcoin platform.
Calderon, 39, who served as Assembly Majority Leader from 2016 to 2020, declared his vision for California to become “the undisputed leader on Bitcoin” in his campaign announcement video.
Meanwhile, Governor Gavin Newsom has intensified criticism of President Donald Trump’s crypto-related pardons, launching a state-backed website tracking what his office calls “criminal cronies.”
The site prominently features Binance founder Changpeng Zhao, who received a full pardon in October after serving four months for Bank Secrecy Act violations, and Ross Ulbricht, whose life sentence for Silk Road operations was commuted.
Beyond political battles, California continues advancing digital asset infrastructure through the Digital Financial Assets Law, which takes effect in July 2025 and requires all crypto service providers to obtain state licenses.
The Assembly also unanimously passed AB 1180 in June, creating a pilot program for state fee payments using digital assets that runs through 2031.
While California debates wealth taxation, other jurisdictions are implementing clearer crypto tax structures.
Japan’s 2026 tax reform blueprint reduces crypto taxation from up to 55% to a flat 20% for specified digital assets handled by registered businesses, though the exact qualifying criteria remain undefined.
Similarly, the European Union’s DAC8 tax transparency law took effect on January 1, requiring crypto exchanges and service providers to collect and report user information to national tax authorities, with data sharing between EU countries beginning July 1.
“Tax authorities now have an automated dashboard tracking your digital assets,” wrote Bitcoin educator Heidi Chakos.
However, just like California, South Korea faces mounting uncertainty over its repeatedly delayed crypto tax regime, now scheduled for January 2027 despite lacking essential infrastructure.
Switzerland also postponed the automatic exchange of crypto account information with foreign tax authorities until at least 2027, though legal frameworks take effect in January 2026.
