The chief executive of the largest U.S. crypto exchange said on live television Thursday that he may leave California before the end of the year. Brian Armstrong, who runs Coinbase (COIN), told CNBC he is "considering all options about relocating out of California before the end of the year," then hedged it immediately: "Nothing to announce yet on that front, but my hope is that cooler heads prevail in California."
Armstrong was reacting to Proposition 40, which California voters decide on Nov. 3.
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"I think it's a dangerous precedent to get into asset seizures," Armstrong said. "That's the kind of thing that third-world countries do. It typically doesn't end well."
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His underlying objection was narrower than the phrase suggests, double taxation, and the problem of pricing what someone owns: "We all pay our taxes on gains and on our income and then you have what's yours, and it's pretty unprecedented for someone to say, well, we're actually going to come tax you again and potentially seize your assets, and there's all these questions about how do you even value that?"
Proposition 40, filed as the 2026 Billionaire Tax Act, would impose a one-time 5% tax on the net worth of individuals worth $1 billion or more. It qualified for the ballot on June 17 after the union SEIU-UHW submitted about 1.6 million signatures against a requirement of 874,641. Revenue would go 90% to health care, 10% to education and food assistance. The nonpartisan Legislative Analyst's Office estimates it would raise "tens of billions of dollars spread over several years" from roughly 200 Californians.
There is a detail in the measure that has gone unreported alongside Armstrong's comment, and it cuts against the plan he described. Proposition 40 attaches liability to anyone who was a California resident on its tax obligation date, January 1, 2026. Only the valuation date is Dec. 31, 2026. On the face of the text, a billionaire who moves out this autumn would still owe the tax if it passes, because the residency test was met almost eight months ago. The measure also reaches trusts funded by a covered individual, including trusts based outside California. Armstrong was not asked about the date in the segment.
Forbes estimated Armstrong's net worth at $7.3 billion as of Aug. 17. A 5% levy on a figure like that is roughly $365 million, although it could fluctuate substantially since the measure prices net worth at year-end. Most of Armstrong's network is held in Coinbase stock, which has traded between about $139 and $402 over the past year. His most recent Schedule 13G/A, covering positions as of Dec. 31, 2024, disclosed 33,103,998 shares, or 13.91% of the Class A stock.
Armstrong also conceded something these fights rarely produce. "If let's say there was just a higher tax in whatever form it arrives in and I felt like it was going toward really productive outcomes like educating people or healthcare," he said, "but the challenge is that we're now seeing there's a pretty high amount of fraud and waste and abuse in California."
The nearest audited state figure is the California State Auditor's 2021 finding that the Employment Development Department “paid about $10.4 billion in claims that it has since determined may be fraudulent.” Armstrong may also be referencing online reporting from conservative lightning rod Nick Shirley, who has highlighted what he portrays as fraudulent hospice activity in the state, although none of Shirley's findings have been tied to actual legal charges or prosecutions in California.
Armstrong is not a bystander here. The San Francisco Standard reported on June 13 that he and Ripple co-founder Chris Larsen helped start a committee against the measure, Golden State Promise, in January. State filings put its money at $10.45 million, $5 million from Ripple Labs, $5 million from Larsen. Two counter-measures on the same ballot are funded almost entirely by a committee called Building a Better California at $63.25 million and $64.25 million; the state lists Sergey Brin and L. John Doerr III among its top donors. The union committee backing Proposition 40 has raised about $31.4 million.
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One departure matters because of how concentrated the tax base is. California's Department of Finance reported in January that the top 1% of earners paid nearly 37% of the state's personal income taxes in 2023, and that the personal income tax supplies close to 60% of General Fund revenue. Fortune reported in March that six billionaires left before the January cutoff. Not everyone is going: Nvidia's (NVDA) Jensen Huang told Bloomberg Television in January he had not thought about it once. Amazon (AMZN) founder Jeff Bezos has separately argued that the country does not have a revenue problem at all.
A personal move would also shift less than readers might assume. Coinbase has had no HQ since Armstrong wrote in February 2021 that it was "a decentralized company, with no headquarters," and its latest 10-K lists Texas as its state of incorporation and New York for its executive offices. But it signed a roughly 150,000-square-foot lease at San Francisco's Mission Rock in May 2025, four years after paying about $25 million to leave its old office there. Investors weighing the stock can see what Wall Street currently makes of it.
For now the position is where Armstrong left it. He has not said he is leaving, and he has not announced a move.
"Nothing to announce yet on that front," he said, "but my hope is that cooler heads prevail in California." Voters answer on Nov. 3.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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