In a move that reverberated across corporate and legal circles this week, Coinbase — the largest U.S.-based cryptocurrency exchange — announced that it will formally leave Delaware and reincorporate in Texas.
The decision, disclosed in a filing with the Securities and Exchange Commission, was accompanied by a sharply worded Wall Street Journal opinion piece from Paul Grewal, Coinbase's chief legal officer, who argued that Delaware's once-gold-standard legal environment has devolved into an unpredictable arena driven by activist rulings and inconsistent outcomes.
The announcement marks a dramatic turn for Delaware, long regarded as the corporate capital of America.
More than a million U.S. companies generate more than a billion dollars annually in fees and associated economic activity.
But Grewal contends that the legal environment underpinning that long-standing relationship has eroded.
"For decades, Delaware was known for predictable court outcomes, respect for the judgment of corporate boards, and speedy resolutions," Grewal wrote. "But no more."
Coinbase's departure is particularly notable because no other major company — tech or otherwise — has recently chosen to leave Delaware for another jurisdiction. In that sense, the crypto exchange is an outlier, though one that is seeking to position itself at the forefront of what it sees as a shifting national landscape for corporate governance.
Grewal argues that Delaware's famed Court of Chancery, once regarded as the most sophisticated business court in the nation, has in recent years issued rulings that companies view as inconsistent, activist, or overly interventionist.
He notes that lawmakers in Dover have repeatedly attempted to patch over judicial surprises with ad hoc legislation — a stopgap solution that Coinbase believes is no longer sufficient.
The concerns, he suggests, go beyond the crypto sector.
In the past two years, Delaware has seen a spate of record-setting defamation and damages awards against corporations — verdicts that, while not involving Coinbase directly, have raised alarm among executives and corporate boards about escalating legal exposure in the state.
Many top companies have left Delaware or announced plans to do so, including the nation's largest mall owner, Simon Property Group; retailer Dillard's; Bill Ackman's Pershing Square Capital Management; venture firm Andreessen Horowitz; online retailer Mercado Libre; Roblox; Tripadvisor; Affirm; AMC cable networks; Madison Square Garden; President Donald Trump's Trump Media; and Dropbox, among others.
Coinbase's move to Texas reflects a growing effort by states to compete for corporate domiciles by offering streamlined regulations and predictable legal frameworks.
Texas, in particular, has taken steps in recent years to cultivate a business-friendly judicial ecosystem.
Grewal points to Senate Bill 29, a major reform that modernizes the Texas Business Organizations Code and codifies the business-judgment rule — long considered a pillar of deference to corporate decision-making.
Combined with the launch of the Texas Business Court system, these reforms give companies strong assurances about governance flexibility and the fair, efficient resolution of disputes.
Grewal wrote: "We believe we can drive forward our mission rapidly if given fair conditions. Our decision to leave is about ensuring more predictable opportunities for the company, our shareholders, our customers and the new on-chain ecosystem we're building."
While Delaware has dominated the incorporation landscape for decades, its reign is not inevitable.
"This choice is much bigger than Coinbase," Grewal wrote. "It's part of a movement of businesses choosing markets with favorable regulatory and judicial-review systems."