Coinbase Ditches Delaware's Unpredictable Courts for Texas Stability

Coinbase Global Inc. (NASDAQ:COIN) has officially filed with the U.S. Securities and Exchange Commission to reincorporate from Delaware to Texas, marking a significant corporate shift as the cryptocurrency exchange distances itself from the state long considered the nation's corporate capital. The move, announced by Chief Legal Officer Paul Grewal in a Wall Street Journal op-ed, reflects growing dissatisfaction with Delaware's legal environment and a strategic pivot toward Texas' "increasingly attractive" business framework.

The decision follows a shareholder vote in which approximately 78% of voting power approved the reincorporation, with the company's board unanimously endorsing the transition. Grewal criticized Delaware's recent judicial unpredictability, particularly citing "unpredictable outcomes" from the Delaware Chancery Court, which historically provided consistent rulings for corporations. "It's a shame that it has come to this, but Delaware has left us with little choice," Grewal wrote, emphasizing that Texas offers a more "efficient and sustainable" legal environment.

Texas' corporate-friendly policies, including Senate Bill 29—which codifies the business-judgment rule to protect board decisions—and the establishment of a specialized Texas Business Court, have made the state a magnet for companies seeking regulatory clarity. Coinbase joins a growing list of firms, including Tesla, Dropbox, and Roblox, that have relocated their legal headquarters to Texas in recent years, often citing Delaware's judicial rulings as a catalyst. Tesla's Elon Musk, who reincorporated his companies in Texas after a Delaware court invalidated his $56 billion pay package, has publicly urged businesses to "get out of Delaware".

Delaware's corporate governance model, which has generated over $1 billion annually from incorporations, now faces challenges as states like Texas and Nevada introduce competitive legal frameworks. Grewal argued that corporate migration reflects a "laboratory of democracy" where businesses can choose jurisdictions that align with their growth ambitions. For Coinbase, the shift to Texas is framed as a pragmatic step to ensure "predictable opportunities" for shareholders, customers, and the broader on-chain economy.