California’s bitlicense is about to go into effect on July 1, 2026, indirectly targeting those who acquire bitcoin and directly targeting those who innovate while using bitcoin. This is one of the most oppressive state laws in the country, similar to the regimes in place in New York (bitlicense regulations), Louisiana’s anti-crypto law (Virtual Currency Businesses Act) and Illinois (Digital Assets and Consumer Protection Act), where notably in Louisiana a new tax has recently been put into effect merely for placing in custody or trading a digital asset. California is not far behind Illinois as it also evaluates passage of a tax, headed for the ballot in November that would if it passes tax you on all unrealized gains, and would likely soon target bitcoin holders with a Illinois styled tax. For those who wondered “Will California find a better way?” the answer is clearly a resounding no, as more people are chased out of the State.

Some will remember over 10 years ago when Kraken published a blog post saying “Farewell, New York.” (Image from that old post shown below, credit to Kraken.)

They weren't the only ones. Various other companies rejected the bitlicense and left New York. Although it would be interesting indeed to see a “Goodbye California” post and similar multi-firm departure from California, instead firms seem to be taking the approach of adopting, for now, these onerous and oppressive licenses in California and New York (even some of those that left New York many years ago).

But if we took the view that each governor and Legislature could control a fiefdom so as to limit and bar the progress of commerce at the border of every state - if that were to be the future - it would be a miserable future. It is one we must reject.

There is a possibility within the context of the CLARITY Act that if it passes - that there could be a way to override such onerous state provisions. We should argue for the passage of CLARITY and sooner rather than later.

However we should also find ways to ensure that innovation is valued more than onerous legislation. Until that is the case, the cancer of bitlicense and State by state reactionary imposition to the growth of use of bitcoin will continue to be an ongoing issue.