Crypto exchange Coinbase to reincorporate in Texas, exit Delaware

Cryptocurrency exchange Coinbase is leaving Delaware and relocating to Texas, the company said in a regulatory filing on Wednesday. The company cited this new business hub's growing attractiveness to innovative companies.

Texas is establishing itself as the new darling of corporate America by attracting companies with its friendly business climate, simple tax rules, relaxed regulatory requirements, and new laws aimed at establishing specialized business jurisdictions.

Several companies with valuations exceeding $1 billion have moved their legal headquarters out of Delaware since last year, a move some have nicknamed "Dexit."

Tesla moved its headquarters to Texas last year in a high-profile relocation, while Trump Media & Technology, owner of Truth Social, moved its headquarters to Florida in April.

With a market capitalization of approximately $82 billion, according to LSEG, Coinbase will be one of the largest companies to relocate its headquarters.

"For decades, Delaware was known for predictability of court outcomes, deference to corporate board decisions, and speedy resolutions," Coinbase Chief Legal Officer Paul Grewal said in an article in the Wall Street Journal on Wednesday.

However, Delaware judges have extended the court's strictest legal standards to a growing number of situations involving controllers, increasing the risk of shareholder lawsuits.

These decisions culminated in last year's blockbuster decision that voided Musk's $56 billion pay package from Tesla. Following the decision, Musk said on Twitter, "Never incorporate your company in the state of Delaware."

Grewal added, "It's a shame it's come to this, but Delaware has left us very few options."

Texas has stepped up efforts to attract cryptocurrency firms, citing regulatory clarity and low operating costs, and recently passed legislation has established the state as a growing hub for blockchain development amid uncertainty in other jurisdictions.

Coinbase is the largest publicly traded cryptocurrency exchange in the US.