Crypto and VC donors pour millions into California legislative race

Two influential figures in the cryptocurrency and venture capital industries are investing tens of millions of dollars in California politics. Their strategy centers on backing moderate, business-oriented lawmakers while countering organized labor’s long-standing power in Sacramento.

The initiative is under the Grow California banner and is sponsored by Ripple co-founder Chris Larsen and venture capitalist Tim Draper. Both are longtime political donors with a record of holding progressive opinions on economic policy. The New York Times reported that the group focuses its expenditure on individual legislative contests, as opposed to statewide ones.

The initiative comes at a time when donors in Silicon Valley are increasingly worried about policy proposals they perceive as unfavorable to capital formation and innovation. Although Grow California was formed earlier than a potential state wealth tax became a subject of political discourse, the proposal has since become a rallying cry among most of its supporters.

Wealth tax fears mobilize Silicon Valley donors

Tension between technology leaders and labor groups has grown after a proposal endorsed by a healthcare union that would tax the assets of California’s wealthiest residents, if passed by voters. Supporters argue that the plan would fund public services and address inequality.

“Whoever designed that wealth tax in the unions — wow, they woke up the sleeping giant like I have never seen, that’s maybe the blessing of this whole thing. Business has got to stop being apologetic for being business. It’s just so lame,” Larsen stated. Larsen has publicly expressed the importance of unions but said uncontrolled influence threatens to destroy California’s economic competitiveness.

Millions deployed to shape legislative races

Campaign finance filings show that Larsen and Draper each gave $5 million to seed Grow California in September. The organization now claims to have raised some $40 million in commitments through a network of independent expenditure committees and affiliated nonprofit entities. Larsen has also stated that he will invest up to $30 million of his own money over several election cycles.

Rather than spreading the resources thinly, Grow California plans to focus on a few competitive state legislative races. The group has said it will not participate in the 2026 governorship race and will avoid costly ballot initiatives. Larsen cited Fairshake, a crypto-backed super PAC that has been active in recent federal elections, as proof of persistence.

The California push comes as federal crypto regulation is growing. Recently, the U.S. Senate Agriculture Committee promoted a bill to create an international digital asset system. The bill would give the U.S. Commodity Futures Trading Commission jurisdiction over spot crypto markets and establish rules for exchanges, brokers, and dealers. The bill, however, passed in a party-line vote, implying little bipartisan support. A similar bill in the Senate Banking Committee, meanwhile, is stuck amid intensive lobbying over stablecoin rules.

If you're reading this, you’re already ahead. Stay there with our newsletter.