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The Texas State Securities Board will begin presenting its enforcement case Monday against TEXITcoin, a Texas-themed cryptocurrency that blends digital money, multilevel marketing and the rhetoric of the Texas independence movement.
The four-day evidentiary hearing is scheduled to begin Aug. 17 at the State Office of Administrative Hearings in Austin. Administrative Law Judge Katerina DeAngelo will consider whether to affirm, modify or set aside an emergency cease-and-desist order issued in February. The proceeding is an administrative case, not a criminal trial.
TEXITcoin promotes itself as a digital currency created in Texas for people seeking an alternative to banks and government-issued money. Its slogan is “Built in Texas. Mined in Texas. Owned by Texans.”
But TEXITcoin, its mining partner MineTXC, its marketing arm Blockchain Mint and founder Robert J. “Bobby” Gray, face allegations that they violated the Texas Securities Act.
The Feb. 11 emergency order alleges MineTXC’s “Mining Packages” were unregistered securities offered through a multilevel marketing operation.
Buyers paid for a share of computing power and received allocations of coins generated by the mining network. Participants could also receive commissions and bonuses for recruiting additional buyers.
Regulators describe the packages as passive investments that Gray promoted as “seats on the TEXITcoin rocket ship.” The Securities Board alleges the respondents were not registered to sell securities and failed to disclose information that prospective purchasers needed to evaluate the risks, including details about company finances, mining operations, custody of funds and Gray’s earlier business history.
“They wanted us to stop offering these alleged securities in Texas,” Gray said.
TEXITcoin says it halted sales of its mining packages after receiving the order, initially suspending sales and recruitment globally. The underlying cryptocurrency network has continued operating.
Gray, who spoke to Texas Public Radio from a boat in Singapore, said he left Texas after the order in what he called a “self-imposed exile.” He acknowledged that the complexity and history of fraud in the cryptocurrency industry could explain the state’s scrutiny.
“Crypto is very confusing. The industry is full of scams,” Gray said. “And so, it’s understandable that the TSSB took an interest in the project and did what they did — not that we like it,” he said.
Gray insists TEXITcoin is not a scam. He describes it as a “community currency” intended to carry forward Bitcoin’s original vision of decentralized, peer-to-peer money.
“I know that we’ve got quite a group of people that have dedicated their time and energy to spreading lies about us,” Gray said.
Tim Tolka, a journalist who covers cryptocurrency for Disruption Banking, has published a series of critical reports about TEXITcoin. He said its marketing and promotional material immediately raised concerns.
“It just seemed like a really kind of dirty scam to trick people,” Tolka said.
Gray also rejects the characterization of the mining operation as a pyramid scheme. He argues that MineTXC offered an actual product — computing power used to mine coins — and that its referral program imposed limits on compensation.
“We have an extremely valuable product,” Gray said. “And also, we have a whole bunch of caps and limitations inside of our referral program.”
The existence of a product does not by itself resolve the Securities Board’s case. The central legal question is whether purchasers were buying mining services or entering investment contracts whose potential profits depended predominantly on the managerial work of Gray and his companies.
TEXITcoin argues that buyers were participants in a legitimate proof-of-work mining pool, not passive investors. Its attorneys say purchasers could monitor their allocations, operate equipment themselves or, in some cases, take possession of mining hardware.
In July, TEXITcoin asked DeAngelo to resolve the dispute without a full hearing. She denied that request, finding that the securities and fraud questions depend on “disputed facts and competing inferences.” The ruling did not decide the merits of the allegations.
The operation claims on its website that it has generated approximately $148 million in gross sales and attracted roughly 55,000 participants. Those are company-reported figures and have not been independently verified.
Tolka said the project’s appeal is closely tied to Texas nationalist sentiment.
“It’s associated with a political movement,” he said. “It’s built around the idea of TEXIT.”
Daniel Miller, president of the Texas Nationalist Movement, said his organization has no business relationship with TEXITcoin and receives no money from it.
“I don’t like it, but, you know, there’s not really anything we can do about it,” Miller said, explaining that the word “TEXIT” is not exclusively controlled by his organization.
Gray also denied an affiliation with the Texas Nationalist Movement.
“I’m not familiar with the Texas Nationalist Movement. We have no affiliation with them. I know of them,” he said.
However, TEXITcoin’s own website explicitly promotes the organization. A page titled “Discover Texas” praises Miller and the movement, links to its website and social media accounts and encourages visitors to “give them a follow.”
In a separate online presentation about TEXITcoin’s origins, Gray said he first encountered the idea of Texas independence through a Joe Rogan podcast and then researched the Texas Nationalist Movement and other secession advocates.
“I came across the Texas Nationalist Movement and these Republic of Texas folks, some really good people there, some weird ones as well,” Gray said.
Gray has also expressed personal support for Texas independence and suggested that TEXITcoin could someday function as a currency for an independent Texas.
“We don’t know what the future holds for Texas or Texans,” Gray said. “And we would like to imagine that if Texas and its people chose to make a political change, that they would have an honest currency that they could use.”
Texas cannot unilaterally secede from the United States under established constitutional precedent.
The coin’s market price has also fluctuated dramatically. Gray said TEXITcoin approached $7 in September 2025 but traded for as little as several cents during subsequent months. Such price swings are common among small cryptocurrencies with limited trading volume and liquidity.
The Securities Board’s fraud allegations include claims that purchasers were not adequately informed about the 2013 Chapter 11 bankruptcy of Mulligan Mint, a silver-minting company connected to Gray.
Regulators contend the operation did not clearly identify Mulligan Mint or its bankruptcy to purchasers before they bought mining packages.
Gray says he discussed the failed business during community presentations and has been transparent about how the experience affected him.
TEXITcoin and Gray categorically deny the state’s allegations. The company says the Securities Board is improperly applying securities law to participation in a cryptocurrency mining pool.
Regulators maintain that calling an offering “mining” does not exempt it from the Texas Securities Act when purchasers supply money and depend on promoters to generate potential profits.
