Texas Regulators Take Action Against Alleged Crypto Fraud
Financial regulators in Texas have taken swift action against a cryptocurrency venture based in McKinney, issuing an emergency cease and desist order. The order targets TEXITcoin, its operator Robert Gray, and two affiliated entities—MineTXC and Blockchain Mint. According to the Texas State Securities Board, the operation was engaged in fraudulent activities through an unregistered investment scheme.
The order highlights that Gray is the central figure behind all three entities. MineTXC functions as the digital mining arm of TEXITcoin, while Blockchain Mint serves as the marketing arm and also produces cold storage coins, which are physical tokens used to access digital holdings. All these entities are under Gray’s control, according to the regulatory filing.
The Mining Packages and Multi-Level Marketing Model
The core of the issue lies in the promotion and sale of “Mining Packages,” which were marketed through a multi-level marketing (MLM) model. In this system, sales agents earn commissions by both selling products and recruiting new sellers. The state claims that Gray and his affiliated operators engaged in illegal, fraudulent, deceptive, and misleading practices when offering these packages to Texas residents.
“Their conduct threatens immediate and irreparable harm to the public,” the order states. Deputy Securities Commissioner Cristi Ramón-Ochoa emphasized the urgency of the situation, noting that investor harm is ongoing and requires rapid intervention.
Response from the Company and Market Impact
In response to the cease-and-desist order, MineTXC updated its website with a message stating that it is no longer accepting new miners or additional hash power. The site, however, framed the change as a celebratory “graduation” and included a note from “Bobby” thanking visitors for 98 weeks of “fun, profit & friendship.”
Despite the warning, the site still shows tallies of nearly 59,000 paying miners, $148 million raised, and $65 million in commissions paid out. Graphics indicate that five more miners were added on February 11, the day the order was issued, and that current miners continue to receive rewards. Top recruiters and earners are also listed, with some individuals earning over $200,000 in rewards.
The price of TEXITcoin has plummeted since the order was issued, dropping from above $0.70 to below $0.30. This decline comes amid a broader downturn in the cryptocurrency market, with Bitcoin hovering below $70,000 after reaching a record high of over $126,000 in October.
Marketing Practices and Regulatory Concerns
State regulators also criticized the marketing strategies used by Gray’s entities. They claimed that the operation misled investors by suggesting that once they purchased a package, they would “sit back and enjoy the ride.” Sales agents used platforms like YouTube, Facebook, X, and radio and billboard ads to promote the packages, which ranged in price from $995 to $8,955.
The marketing also included a detailed commission structure and bonus program to encourage recruitment. However, the packages were not registered as securities, making their sale in Texas illegal. Additionally, the operation failed to disclose critical financial information, including details about the qualifications of MineTXC’s managers and asset and liability information for Danager Resources, which was listed as the mail recipient for check payments.
Gray’s previous company, Mulligan Mint, was also intentionally omitted from disclosures, despite having filed for bankruptcy in 2021.
Big Ambitions in the Crypto Space
Robert Gray, a prominent figure in the crypto community, has long promoted TEXITcoin as a unique, Texas-based cryptocurrency. He described it as the only coin with a regional limitation on where it can be mined, differentiating it from other digital assets. During a speech at a crypto event in Singapore last year, Gray attempted to reassure attendees that TEXITcoin was not a scam, emphasizing that it was not a meme coin, pump and dump, rug pull, Ponzi scheme, or pyramid scheme.
He also highlighted the venture’s promotional efforts, including billboards, airport ads, and “wrapped hypercars” in Dallas. In a previous interview, Gray recounted creating what he called the “original Bitcoin coin”—a copper-colored physical representation of the digital currency—which he claimed became the most famous coin in the world.
Despite these claims, the Texas State Securities Board has warned that the crypto industry continues to attract scams, with fraud and energy consumption concerns remaining significant issues. As the regulatory landscape evolves, investors must remain vigilant in identifying legitimate opportunities in the fast-moving world of digital assets.