Coinbase, the largest cryptocurrency platform in the United States, is relocating its headquarters from Delaware to Texas, citing the state’s favorable business climate. This move aligns Coinbase with other prominent companies like Tesla, SpaceX, and Dropbox, who have also made similar transitions. The $82 billion company has officially filed paperwork with the Securities and Exchange Commission (SEC) to reincorporate in Texas.
Paul Grewal, Coinbase’s chief legal officer, expressed regret over leaving Delaware, once a prime location for major corporations, hosting more than 60% of S&P 500 companies and contributing significantly to the state’s revenue through corporate fees. However, recent unpredictable rulings from Delaware’s Court of Chancery have prompted many companies, including Coinbase, which is facing a shareholder lawsuit over stock sales from its 2021 public listing, to consider relocating.
Texas, along with Nevada, is emerging as a formidable alternative to Delaware, having implemented laws that limit shareholder lawsuits and enhance corporate decision-making protections. Senate Bill 29 and the Texas Business Court system provide a “business-friendly legal environment with solid protections and efficient dispute resolution,” according to Grewal.
Elon Musk’s decision to move Tesla and SpaceX to Texas highlights a similar rationale, as Delaware court decisions had previously impacted his compensation packages. Musk publicly encouraged companies to leave Delaware for more predictable legal environments.
Coinbase CEO Brian Armstrong, known for his support of former President Donald Trump, emphasized the strategic benefits of moving to Texas. Grewal elaborated that the decision aims to secure more consistent opportunities for Coinbase’s growing ecosystem, benefitting the company’s shareholders, customers, and overall mission progress in a more supportive legal framework.