Coinbase’s Texas move gets a shareholder suit dismissed over Delaware-era claims

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Coinbase’s move to Texas changed the rule a shareholder had to satisfy before suing its directors over alleged conduct from the company’s Delaware years. In an October 2 ruling, the Texas Business Court dismissed Gary Guillaume’s derivative action because he had not first demanded that Coinbase take action on the claims.

The dismissal was without prejudice, and the court did not decide whether the alleged misconduct occurred. Its consequential finding concerned who could pursue claims belonging to Coinbase: Texas’s demand requirement applied to the shareholder’s authority to sue, even though the court assumed without deciding that Delaware law governed the underlying claims.

On October 9, Coinbase CEO Brian Armstrong praised the precedent as encouraging more companies to incorporate in Texas and thanked Greg Abbott. That endorsement came a week after Judge Andrea K. Bouressa signed the order. The immediate lesson for public shareholders is that the law governing a company’s past conduct and the law governing their ability to challenge it can diverge after reincorporation.

A derivative action lets a shareholder pursue a claim on the corporation’s behalf. The claim belongs to the company, and the shareholder seeks to exercise authority ordinarily held by its board. That distinction explains why the first dispute here concerned permission to bring the action rather than the directors’ alleged wrongdoing.

The parties agreed that Guillaume filed his suit on April 16, 2026, alleging misconduct between April 14, 2021, and June 5, 2023. Coinbase was incorporated in Delaware during that earlier period. Its Texas conversion became effective on December 15, 2025, several months before the suit was filed.

Under the Delaware framework described in the opinion, a derivative plaintiff can make a demand or plead that doing so would be futile. Futility requires particularized allegations about individual directors, examining whether they received a material personal benefit, face a substantial likelihood of liability, or lack independence from someone who benefited or faces such liability. At least half the relevant board must satisfy the test.