Coinbase Cites Legal Certainty in Move Toward Texas Incorporation

• Coinbase highlights Texas’ legal reforms as more predictable than Delaware’s system.
• Major firms like Tesla and Schwab also moved to Texas citing efficiency and cost benefits.
• Coinbase aligns incorporation decisions with its mission and expanding regulatory goals.

Coinbase’s top executives have shown a shift in U.S. corporate sentiment away from Delaware’s once-dominant incorporation model, pointing to Texas as a more predictable and efficient legal environment. The company’s Chief Legal Officer, Paul Grewal, detailed the rationale in an op-ed published in The Wall Street Journal, noting that Texas’ recent corporate-law reforms provide greater governance flexibility and clearer judicial outcomes for businesses.

Grewal wrote that Delaware’s Chancery Court, long regarded as a gold standard for resolving corporate disputes, has become less consistent in recent years. “Delaware’s legal framework once provided companies with consistency,” he stated. “But no more. Delaware’s Chancery Court in recent years has been rife with unpredictable outcomes.” He contrasted this with Texas’ approach, citing “efficiency and predictability” as key factors supporting Coinbase’s preference.

Texas has enacted several reforms to its business statutes in recent legislative sessions, aiming to attract corporations seeking clarity in governance rules and liability structures. The state’s focus on legal predictability aligns with a growing trend among large U.S. companies reevaluating their incorporation choices.

Broader Migration Toward Texas

Several high-profile firms have already made similar moves. Electric-vehicle maker Tesla and financial services provider Charles Schwab both relocated their corporate registrations to Texas in recent years, citing regulatory efficiency and lower operating costs. Tesla’s chief executive publicly discouraged incorporation in Delaware in early 2024, writing on X, “Never incorporate your company in the state of Delaware.”

Coinbase, listed on Nasdaq, operates a digital-asset exchange that enables trading, staking, and price speculation on cryptocurrencies. The company went public in 2021 and has expanded its regulatory footprint since then. Earlier this year, it signed an agreement with JPMorgan Chase to streamline crypto purchases for users and filed for a National Trust Company Charter with the Office of the Comptroller of the Currency (OCC).

Strategic Reassessment of Incorporation Jurisdictions

Coinbase CEO Brian Armstrong wrote on X that the company’s decision process reflects its mission. “Coinbase has always been about increasing economic freedom, and this factors into the state where we choose to incorporate,” he said.

The statements from Coinbase leadership signal a continued shift among major U.S. firms toward jurisdictions prioritizing streamlined governance and business-friendly regulation.