Coinbase Seeks Refuge in Texas Amid Frustration with Delaware’s Judicial System
Coinbase, a leading cryptocurrency exchange, is re-incorporating in Texas after its shareholders voted in favor of the move, marking the end of its decades-long registration in Delaware. This decision comes amid growing frustration with the unpredictability of Delaware’s Chancery Court, which has long been considered the gold standard for resolving business disputes.
The move is seen as a significant blow to Delaware’s reputation as the corporate capital of America. Paul Grewal, Coinbase’s chief legal officer, expressed his disappointment with the state’s court system, stating that it has become increasingly unpredictable and undermines the stability that has long made Delaware attractive to businesses. Grewal noted that the Chancery Court’s unpredictable outcomes pose an untenable risk to public companies that must navigate complex legal landscapes.
Coinbase Joins the Corporate “Dexit” Movement
Coinbase is not the only company to break with Delaware in recent times. Tesla made a similar move last year after the Delaware Chancellor’s Office voided Elon Musk’s multibillion-dollar compensation plan. This trend has been dubbed “Dexit” and highlights the growing dissatisfaction with Delaware’s judicial system among major corporations.
The decision to re-incorporate in Texas comes after a quarter of impressive financial performance for Coinbase. The company reported third-quarter earnings that beat analysts’ expectations, posting $1.5 per share versus the consensus of $1.05, a 45% increase. Revenue reached $1.86 billion, up 25% quarter-over-quarter, driven by $1 billion in transaction revenue, $747 million from subscriptions and services, and $355 million in stablecoin revenue.
Financial Performance and Expansion
Coinbase’s spot trading volume increased 38% globally and 29% in the US, while net income reached $433 million and adjusted EBITDA totaled $801 million. The exchange also expanded its crypto holdings, achieving a combined derivatives trading volume of over $840 billion following its acquisition of Deribit. This strong financial performance and expansion into new markets demonstrate Coinbase’s commitment to growth and innovation, despite the challenges posed by Delaware’s judicial system.
For more information on Coinbase’s decision to re-incorporate in Texas and its implications for the cryptocurrency industry, visit https://crypto.news/coinbase-legal-sanctuary-texas-amid-delaware-drift/
