Leaving The First State For The Lone Star State: Coinbase Leaves Delaware And Saddles Up For Texas

On November 12, 2025, leading U.S. cryptocurrency platform, Coinbase, notified the Securities and Exchange Commission of its plan to leave Delaware and reincorporate in Texas. Coinbase's decision highlights a growing trend among major companies seeking a more predictable and business-friendly legal environment, particularly regarding corporate governance.

"Delaware has left [Coinbase] with little choice," says Coinbase Chief Legal Officer Paul Grewal in a Wall Street Jornal op-ed. He explained that "Delaware's legal framework once provided companies with consistency. But no more." Grewal added, "Texas offers efficiency and predictability, in part thanks to recent corporate-law reforms that enhance governance flexibility and legal predictability."

Coinbase highlighted several key differences between Delaware and Texas law in its Schedule 14C filing.

• Shareholder Inspection Rights: Under Texas law, a shareholder can only inspect a corporation's books and records if they hold at least 5% of outstanding shares or have been a shareholder for at least six months. In contrast, Delaware has no such ownership or time restrictions for inspection rights.
• Scope of "Books and Records" Requests: Texas law does not consider emails, text messages, social media posts, and similar electronic communications part of a company's books and records unless the effectuate a corporate act. In contrast, Delaware law—which has seen recent amendments narrowing the definition of "books and records" to formal corporate documents—still allows for circumstances where such communications (e.g., email, texts) may be inspected.
• Derivative Shareholder Suit Ownership Threshold: Texas allows companies to restrict derivative suits to investors who own at least 3% of the company. In contrast, Delaware has no such statutory ownership threshold.
• Jury Trial Waiver: Texas permits companies to include in their governing documents an enforceable waiver of the right to a jury trial for any internal entity claims. While this law is subject to legal challenges, it comes in the wake of the SEC's recent policy statement expressing its position that mandatory arbitration provisions in corporate bylaws do not violate federal securities laws. In contrast, Delaware law does not expressly authorize the inclusion of such jury trial waivers for internal entity claims.
• Director Duties: Texas allows directors to consider interests of other constituencies beyond long-term shareholder value. In contrast, in Delaware, Directors are expected to focus on maximizing long-term stockholder value.

Other points emphasized by Grewal include Texas's recent codification of the business judgment rule, and its newly established Business Court providing a dedicated forum for corporate disputes. While Texas's body of corporate law is indeed undeveloped relative to Delaware, Grewal believes Texas "gives companies a business-friendly ecosystem with strong protections and efficient dispute resolution." And Coinbase isn't alone. Several other high-profile companies have recently left Delaware for Texas, including Tesla, SpaceX, and Dropbox.

Ultimately, Coinbase's move underscores a broader shift in corporate America: companies are no longer tied to Delaware's historic dominance and are actively seeking jurisdictions that offer clearer rules, stronger protections, and greater flexibility to innovate—Texas is quickly becoming one of those destinations.

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