Texas Wins Another: Coinbase Ditches Delaware Amid Legal Uncertainty

Coinbase Ditches Delaware, Heads to Texas in Latest Corporate Exodus

Coinbase is officially breaking up with Delaware.

In a move that’s starting to look less like a trend and more like a full-blown migration, the exchange has filed SEC paperwork to reincorporate in Texas, Chief Legal Officer Paul Grewal revealed in a Wall Street Journal op-ed this week.

According to Grewal, Texas has become “an increasingly attractive hub for innovative companies like ours.” The subtext: Delaware isn’t the safe, predictable corporate haven it used to be.

Delaware’s Shine Is Wearing Off

For decades, Delaware has been the corporate capital of America. Nearly two million businesses call it home, including over half of all publicly traded companies. But recent rulings from the Delaware Chancery Court have made some boardrooms uneasy.

Grewal blasted the court for its “unpredictable outcomes,” echoing a sentiment that has been spreading ever since last year’s showdown between Elon Musk and Delaware judges.

The Musk Effect

Musk arguably lit the fuse.

After a Delaware court voided his $56B Tesla pay package, he moved both Tesla and SpaceX to Texas. Texas shareholders later approved a $1 trillion compensation package for him — something that would have faced tougher scrutiny in Delaware, where shareholder lawsuits are easier to bring.

Texas, by contrast, makes it far harder for minority shareholders to sue companies or directors. That alone has been enough to pull in everyone from a16z to Roblox, Dropbox, and Pershing Square, many of whom have fled either to Texas or Nevada.

Why Coinbase Says Texas Makes More Sense

For Coinbase, the move comes down to one word: predictability.

The company pointed to Senate Bill 29, legislation that enshrines the business-judgment rule into Texas law, giving executives clearer protection when making decisions. On top of that, Texas is rolling out a new Business Court system, designed specifically to give companies a faster, friendlier place to resolve disputes.

Put together, it’s a corporate legal environment that Coinbase argues is simply more stable than Delaware’s current trajectory.

Delaware Isn’t Giving Up

Delaware officials are fully aware of the exodus — and the massive state revenue at stake.

Gov. Matt Meyer said earlier this year that his administration is actively trying to retain companies and win back those that left: “We’re understanding what the issues are and understanding what ways we can do better.”

Whether that’s enough to stop the bleeding remains to be seen.