BitGo moves headquarters to South Dakota ahead of IPO

Source: CryptoNewsNet Original Title: BitGo moves headquarters to South Dakota ahead of IPO Original Link: 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.

Background: 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 the Governor of California for poor leadership in the state. In recent social media posts, Belshe referenced the proposed bill, saying California was kneecapping all future businesses to get a slight tax increase, questioning “Who in their right mind would found a new business in California if California does this?”

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.

Some technology leaders in the tech sector have already moved their companies outside California, citing an unfavorable business environment, regulations, and taxes as the main reasons.

Tax Proposal Details and Concerns

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.

It raises legal concerns, including those under the Uniformity Clause of the California Constitution and the Dormant Commerce Clause. Many believe 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.

Massachusetts introduced a similar bill that mandates 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.

BitGo’s IPO Plans

A previous 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.