Arizona Sends a Letter: What the AZCC Order Actually Says

Ten days after we walked out of a four-day contested hearing in Austin, a second envelope showed up — this one from Arizona.

On 27 August 2026, the Securities Division of the Arizona Corporation Commission issued a Temporary Order to Cease and Desist and Notice of Opportunity for Hearing, Docket No. S-21421A-26-0387. It names Iskander Digital Mining Cooperative (IDMC, a Wyoming DUNA), Arizona promoter Patriot Trading Metals Group, LLC, and Joseph Jaquint.

We're publishing it the same way we published everything in Texas: the full document, unredacted, pinned to IPFS, on day one. Read the order yourself — 11 pages, no highlights from us until after you've formed your own opinion.

Ten days after the Texas hearing wrapped, Arizona's Corporation Commission issued a temporary cease and desist naming Iskander Digital Mining Cooperative. TEXITcoin isn't a respondent and TXC isn't alleged to be a security — here's the full order and what it actually says.

First, the part everybody is going to get wrong

Let's kill the bad headline before it gets written.

• TEXITcoin is not a respondent. Neither is MineTXC. Neither is Blockchain Mint.
• The order does not allege that TXC is a security. It doesn't allege ISK is one either.
• This is a temporary order. It is a set of allegations from a regulator, not a finding by a judge, not an adjudication, and not proof of anything.
• Every respondent has the right to a hearing — 20 days to request one, 30 days to answer.

If you read a post this week claiming "Arizona shuts down TEXITcoin," that person did not read the document. The document is one click away.

What Arizona actually alleges

The Division's theory is the same shape as the one we just spent four days answering in Texas: that a membership in a mining cooperative is really an investment contract.

Specifically, the order alleges that IDMC's "Seat on the Rocket Ship" memberships — $1,000 each, carrying 100 MH of hash power and one vote — are unregistered securities, and that they were offered or sold in or from Arizona by people not registered as dealers or salesmen under A.R.S. §§ 44-1841 and 44-1842.

Their supporting points:

1. Managerial effort sits with the cooperative. Equipment, power contracts, mining operations, accounting, and reward distribution are handled by the Board and its committees rather than by ordinary members — which, in the Division's reading, makes members passive.
2. The affiliate program looks like MLM to them. A two-leg structure with twelve compensation tiers gets characterized as commissions paid out of new revenue.
3. The vote doesn't save it. They treat the one-member-one-vote governance right as nominal rather than as real managerial control.

That's the case. It rises or falls on whether a member of a mining cooperative is a passive investor or an active participant in a productive enterprise.

Why we've heard this song before

In Texas, the TSSB argued Mining Packages were investment contracts. We answered with a sworn declaration, a 26-page expert report from a CPA at Ankura, and on-chain evidence that the operation ran exactly as advertised — including the 200+ customers who took physical possession of their rigs. The hearing happened. The record exists. The judge's proposal for decision is due by year-end.

We also now have federal wind at our back that didn't exist a year ago: SEC Interpretive Release No. 33-11412 states plainly that protocol mining on public proof-of-work networks — including pool operations and reward distribution — does not involve the offer and sale of securities under Howey.

Arizona is a different state, a different agency, and a different set of respondents. But the underlying question is the one this whole industry keeps circling: is doing the work the same thing as buying a promise?

What we're doing about it

Three things, in order.

One: we compartmentalize. We've restructured the legal page around a case docket organized by jurisdiction. Texas stays exactly where it was — every filing, every cost, every setback, unchanged. Arizona gets its own case file with its own timeline. Two fronts, two records, zero muddling. If a third one lands, it gets its own page too.

Two: we publish everything. Same standard as Texas. Every document that arrives goes up, whether it's good for us or not. The redacted witness list went up. The denied motion for summary disposition went up. Regulation by enforcement thrives on the absence of a clear public record — so we make one.

Three: we keep building. Sales outside Texas reopened on 23 August. The network keeps producing blocks. Terminals keep going in. Nobody's mining rig stopped hashing because a Phoenix office sent a PDF.

The honest part

We're not going to pretend this is fun. It costs money we'd rather spend on merchants and terminals — we're past $973,000 out of pocket on legal already, and that number only goes one direction. It costs time. It gives the people who were never going to buy anyway one more reason to feel clever.

But here's what four days at SOAH taught us: the truth holds up under cross-examination. We managed money well. We told the truth. There was no fraud. That was true in Texas in February, it was true on the witness stand in August, and it's true in Arizona today.

We'll answer the order. We'll publish what happens. You'll be able to check our work either way.

Documents: Arizona temporary C&D, Docket S-21421A-26-0387 (11 pages, IPFS) · Arizona case file · Texas case file

Nothing here is legal or investment advice. It's a project telling you what showed up in its mailbox.