Coinbase Joins Delaware Exodus, Set to Re-Incorporate in Texas

Coinbase filed with the SEC to move its state of incorporation to Texas, joining a growing number of companies leaving Delaware. The crypto exchange cites “unpredictable outcomes” and rising uncertainty within the state’s legal framework as key reasons for the shift. 

The move places Coinbase alongside companies such as SpaceX, Tesla, and Dropbox, which have all sought the benefits of Texas’s more business-friendly legal climate.

Protecting Shareholder Interests

On Wednesday, Coinbase submitted a filing to the SEC to formally relocate its legal incorporation from Delaware to Texas. Paul Grewal, Coinbase’s chief legal officer, announced the decision in a Wall Street Journal op-ed, pointing to Texas’s favourable business environment, lower operating costs, and clearer regulatory landscape as key motivators.

For decades, Delaware has been the preferred state for US corporate incorporation due to its expert judiciary, flexible corporate code, and reputation for balancing executive and shareholder rights. However, recent legal uncertainty has prompted many companies to look elsewhere. With competing states innovating to attract high-growth businesses like Coinbase, Delaware is experiencing a noticeable uptick in corporate departures to states such as Texas and Nevada. 

In a thread on X, Grewal shared the news, emphasising Coinbase’s commitment to protecting its customers, employees, and shareholders.

Given the company’s duties to its shareholders, Coinbase’s decision to move its legal base to Texas is unsurprising. According to CNBC, Texas law allows corporations to limit shareholder lawsuits against insiders for breach of fiduciary duty. Coinbase and one of its early investors, venture capital firm Andreessen Horowitz, are currently facing a Delaware lawsuit related to the sale of Coinbase shares ahead of its 2021 public listing.

Coinbase Left with “Little Choice”

Grewal argues that Delaware’s once-reliable legal framework no longer provides the consistency it used to. He cited recent “unpredictable outcomes” in the Delaware Court of Chancery, including its 2024 decision to void Elon Musk’s $56 billion Tesla compensation package—despite shareholder approval. The ruling prompted Musk to move SpaceX’s incorporation from Delaware to Texas. In a post announcing the change, Musk remarked on X:

In an X post, Grewal also highlighted growing competition from states “innovating to offer the right environment for businesses and innovators to thrive.” He continued:

Grewal further expressed gratitude to Texas Governor Greg Abbott for fostering an environment that welcomes companies like Coinbase.

While addressing the US’s return to a more free-market economy on X, Grewal used his op-ed to directly criticise Delaware’s declining reputation. Acknowledging the intense competition from other states, he wrote:

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