Coinbase Global, Inc. is following in Tesla Motors' footsteps by relocating its incorporation from Delaware to Texas.

Paul Grewal, Chief Legal Officer of the cryptocurrency exchange, announced the move in a blog post on Wednesday. This comes a year after Elon Musk completed a similar relocation for his electric vehicle company. Musk also shifted the incorporation of his aerospace firm, SpaceX, from Delaware to Texas.

"Delaware’s legal framework once provided stability for businesses, but that is no longer the case," Grewal wrote, citing "unpredictable rulings" from the Delaware Court of Chancery.

Several major companies, including cloud storage provider Dropbox, travel platform TripAdvisor, and venture capital firm Andreessen Horowitz, have also announced plans to leave Delaware. This trend gained momentum after the Delaware Court of Chancery ruled that Tesla must rescind Musk’s 2018 compensation package, which included stock options worth approximately $56 billion.

In February 2024, Musk urged companies still incorporated in Delaware to relocate, posting on X: "If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible."

Last week, Tesla shareholders approved Musk’s new compensation plan, which could be worth up to $1 trillion.

Delaware has long been the preferred state for U.S. corporate incorporation due to its flexible corporate laws and specialized judiciary, which balances executive and shareholder rights. Meanwhile, Texas law allows companies to limit shareholder lawsuits over fiduciary duty breaches by insiders.

Currently, Coinbase and its early investor Andreessen Horowitz face a lawsuit originating in Delaware related to stock sales during the exchange’s 2021 public listing.

Similar to Musk, Coinbase CEO Brian Armstrong has been a major donor to Donald Trump’s 2024 presidential campaign.