An $82billion company is moving to Texas to avoid a blue state’s rules and regulations.
Coinbase, America’s largest cryptocurrency platform, said it filed paperwork with the Securities and Exchange Commission to leave Delaware.
‘It’s a shame that it has come to this, but Delaware has left us with little choice,’ Paul Grewal, the company’s chief legal officer, wrote in a Wall Street Journal op-ed.
‘This choice is much bigger than Coinbase. It’s part of a movement of businesses choosing markets with favorable regulatory and judicial-review systems.’
Delaware has been locked in a battle with conservative states over its status as a corporate stronghold.
For decades, companies have flocked to Delaware for its business-friendly laws, well-versed courts, and balanced approach to shareholder and corporate rights.
More than 60 percent of the S&P 500 companies are incorporated in Delaware, and one-third of the state’s budget is generated by the $2billion in corporate fees they collect annually.
But Texas and Nevada have stepped up challenges to the First State’s lucrative incorporation supremacy by passing laws that limit shareholder lawsuits.
Coinbase said it was moving to Texas. The company’s chief legal officer said it was ‘part of a movement of businesses choosing markets with favorable regulatory and judicial review systems’
Coinbase’s CEO, Brian Armstrong, is following Elon Musk and moving his company to Texas
Coinbase’s announcement comes a year after electric carmaker Tesla also moved from Delaware to Texas.
Elon Musk’s company faced several lawsuits over the CEO’s compensation, including a headine-grabbing 2018 suit over a $56billion pay package.
Musk reincorporated the business in Texas and recently won a pay package that could make him the world’s first trillionaire.
‘If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible,’ he wrote on X after successfully moving SpaceX to Texas in February 2024.
A handful of other companies — including Dropbox, TripAdvisor, and Andreessen Horowitz — have also ditched Delaware for the Lone Star State.
‘We’re ambitious. We believe we can drive forward our mission rapidly if given fair conditions,’ Grewal said.
‘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.’
This is a breaking news story. Updates to come.
