Four days of sworn testimony. An emergency government order hanging over our heads since February. A real blockchain, real mines, and real people receiving real TXC. Now both sides have filed their post-hearing briefs. Here is what happened—and what we have asked the judge to do about it.

When people pay for real proof-of-work mining and receive the mined coin, on what evidence can the State call that arrangement a security—and why did it wrap that legal theory in a story of fraud?

That is the legal fight. The other fight is over the story the State told about us: whether a risky, ambitious community currency can be real without being either a scam or a security.

Four days under oath, now paired with both filed briefs. What the record shows, why our brief rejects the fraud and securities allegations, and why the Path to $16 remains a plan—not a promise.

The TSSB did not merely say our mining packages might fit within an evolving definition of an investment contract. It issued an Emergency Cease and Desist Order that wrapped that legal theory in allegations of deception, concealment, sales agents, missing disclosures, and people who supposedly “never receive any mining hardware.” Those words did real damage before we ever had a chance to call one witness.

Now we have had that chance.

This is my account of the four days before Administrative Law Judge Katerina DeAngelo in SOAH Docket No. 312-26-14427, now paired with the filed briefs. It includes the testimony our brief relies on, the arguments the State makes against us, and our answers. Accuracy means keeping those categories separate.

The judge has not ruled. Both sides filed their initial post-hearing briefs on October 9, 2026; replies are due October 23. This account has been updated against our filed brief. Our position is the position we put on the record—not a judicial finding, a prediction, or legal advice. The State’s competing claims are identified as its claims, not adopted as admissions.

The official transcripts control. All four days are pinned permanently to IPFS:

• Day 1 — August 17, 2026
• Day 2 — August 18, 2026
• Day 3 — August 19, 2026
• Day 4 — August 20, 2026

The written arguments are now part of that public record too:

• Our post-hearing brief — 95 PDF pages
• The Enforcement Division’s written closing argument — 115 PDF pages

The shortest honest version

If you only read one section, read this one.

I believe the hearing exposed two very different cases that had been stapled together in the Emergency Order.

The first is the fraud and disclosure case. On that front, the State’s own lead investigator agreed under oath that the Order does not allege I affirmatively lied, does not allege missing or embezzled money, does not allege guaranteed profits, does not allege purchasers were coerced, and does not allege the mines were fake. He agreed that the central representations about hash-power allocation and daily TXC distributions were true. He knew before the Order that our risk warnings existed. He agreed that at least one absolute statement in the Order—“Investors never receive any mining hardware”—was false because some purchasers did receive home-mining equipment.

Our filed brief rejects the omission case on every required element: no duty to disclose was established; the supposedly concealed information was publicly disclosed; purchasers had an equal opportunity to discover it; and the State failed to prove intentional concealment, materiality, reliance, or injury from nondisclosure. We also argue that the Texas Securities Act’s anti-fraud provisions do not apply because the mining packages were not securities. These are our submitted arguments, which the judge must decide. They are not concessions that some undisclosed fraud remains. (Our brief, pp. 27–48.)

The second is the securities-classification case. Our filed position is that a purchaser paid a one-time fixed price and received a pro rata daily allocation of TXC, a commodity—not an interest in a company or a share of its profits. Purchasers contributed the computational power they bought. Our team acquired and hosted it on their behalf. The machines performed the relevant mining work; hosting, maintenance, security, and reward administration were ministerial functions. The State disputes that analysis. We do not agree that outsourcing those functions creates a security. (Our brief, pp. 49–65.)

Our answer is also straightforward: this was a mining pool. A package allocated real hash power. Real machines performed proof of work. Real TXC was mined. Purchasers received the promised pro rata output every day. They did not receive stock, equity, a claim on a company’s revenue, or a share of someone else’s profits. Our expert described the arrangement as a service contract and the operator’s functions as the ordinary logistics of running a pool. The output came from computational work, not from a managerial promise to make a business profitable.

My position is not that the law has no questions left to ask. It is that the State has the burden of answering them with facts rather than calling an unfamiliar product a security by reflex. We sold access to productive computation and delivered the commodity it produced. Then the value of that commodity depended on a whole community—not my ability to guarantee a price.

What this hearing was—and was not

This was an administrative hearing at the State Office of Administrative Hearings, not a criminal trial and not a jury trial. Judge DeAngelo heard evidence, ruled on objections, questioned witnesses, and will issue a Proposal for Decision after post-hearing briefing. The TSSB ultimately acts through its statutory process, subject to whatever review rights follow.

The case is styled against TEXITcoin, MineTXC, Blockchain Mint, and Robert J. Gray. We argued that several of those names are not separate legal entities at all: TEXITcoin is a blockchain and native digital commodity, while MineTXC and Blockchain Mint were operating names. The State’s investigator acknowledged the entity problem, but the legal effect remains for briefing and decision.

The TSSB’s team was led by Jeramy Heintz with Kristen McCourt and Justin Bontrager. Our hearing team included Avi Perry, Alex Rossmiller, Michael Bloom, Joshua Fiveson, and others. The witnesses, in order, were:

1. Robert J. “Bobby” Gray—called first by the TSSB;
2. Phillip Fuselier—the TSSB’s principal investigator;
3. Marcus Hesse—a mining-package purchaser;
4. Charles Gamero—a mining-package purchaser;
5. Bret Hinson—a mining-package purchaser;
6. Greg Block—a mining-package purchaser;
7. Nike Nickel—a mining-package purchaser and large open-market TXC buyer;
8. Marianne Escalante—our administrative and records witness;
9. Andrew Sotak—our forensic-accounting and digital-assets expert; and
10. Steve Walsh—our mining-operations witness.

The State called me first. I created TEXITcoin and spoke about it publicly, repeatedly, in my own words. That gave the State plenty of clips to play. It also gave us the surrounding warnings and explanations to put back into the record. A founder’s visibility is not proof that purchasers were promised profits from his management.

The legal fight without the Latin

The word “security” does not only mean a share of stock. An “investment contract” can also be a security. The familiar framework asks, in broad terms, whether people put money into a common venture with a reasonable expectation of profits to be derived from the essential entrepreneurial or managerial efforts of others. Texas law has its own language, history, and briefing questions, but that framework shaped much of the hearing.

Nobody seriously claimed TXC itself was stock. Our expert testified it has the characteristics of a digital commodity. The State did not make the native coin itself the security. Its case targeted the transaction used to obtain mined TXC: the mining package.

The State’s story was this:

• people paid $995 or more;
• the payment came before the hash power was assigned;
• purchaser money helped build and run a common mining operation;
• respondents selected and controlled the sites and machines;
• purchasers generally did not install, maintain, power, secure, or operate anything; and
• without our continuing work, the packages would not produce or distribute TXC.

Our story was this:

• a package bought a defined allocation of computational power;
• additional package sales corresponded to additional mining capacity being acquired and added;
• the machines—not management—performed the proof of work;
• the pool operator handled ordinary technical and logistical functions;
• each purchaser got a calculable pro rata share of the mined commodity;
• the purchaser received no equity, revenue share, company profit, or corporate rights; and
• hosted mining does not become a security merely because the customer pays someone else to plug in, cool, and maintain the hardware.

We agree that economic reality controls. We do not agree with the State’s characterization of that reality. Its version treats buying computational resources as contributing nothing but money and treats ordinary hosting as investment management. Our brief directly rejects both premises. Maintaining equipment does not itself establish that a purchaser’s hoped-for gain comes from essential managerial efforts. (Our brief, pp. 49–65.)

Day One: The State calls me first

Opening statements: two universes in one room

The State opened with “economic reality over labels.” It argued that calling the product hash power, a mining seat, or a community program could not change what purchasers actually did: they paid money, our team did the work, and they hoped to profit.

Our counsel opened with the line that would hang over all four days:

“This is just not a real fraud case. There is no lie in this case.”

Counsel emphasized that the Order did not identify a single affirmative false statement by me, that no money was alleged missing, that every commission was paid, that purchasers got their mined TXC, and that participation was capped so no one could put in more than roughly $9,000 through the standard package offering.

That cap matters to me. It did not make the product safe. Crypto is not safe. It did mean we deliberately refused unlimited money, even when more money would have been easy to accept. That is strange behavior for the imaginary fraudster in the Order.

The State emphasized that purchasers did not personally do the hosting. Our counsel asked where the alleged deception was, and why buying a commodity-producing service should be treated as buying an investment contract.

What the State needed from me

The State walked methodically through the mining operation:

• Did purchasers select the site? No.
• Did they negotiate the electric rate? No.
• Did they choose and order the ASICs? No.
• Did they wire transformers or install immersion cooling? No.
• Did they repair failed machines? No.
• Did they calculate the pool distribution? No.

Those answers were true. I gave them without hedging because hiding the ball would have been ridiculous. The whole point of a hosted mining pool is that a team does the things an ordinary person cannot economically or safely do at home.

The State uses those answers to argue “efforts of others.” Our brief explains why that is the wrong work to measure. The relevant work is the computational resources purchasers contributed through their hash power. Keeping those resources powered, cooled, and connected is the pool operator’s ministerial work—not a promise to create investor profits. (Our brief, pp. 60–64.)

My answer remains that the essential productive work is the cryptographic computation performed by the hardware. The operator does not decide whether the blockchain will award a block, what TXC will trade for, or whether the broader community will adopt it. We facilitate computation. We do not manufacture profit.

That distinction is now fully briefed. We cite the SEC’s mining interpretation, Sotak’s testimony, and commodity cases separating reliance on a seller for delivery from reliance on the market for gain. The State must answer that analysis, not simply point out that somebody repaired a machine.

The plan I am not sorry for

Then came the language the State wanted to put on trial:

“One seat on the rocket ship.”

“Sit back and enjoy the ride.”

“The path to $16.”

Yes, I said those things. I believe TEXITcoin can compete at the top of this industry, and I am not going to pretend I built a community currency without a plan for its growth. The Path to $16 laid out the connection I see among growth, cash reserves, the size of the community, and a stair-step strategy toward a billion-dollar value. It was a plan and a thesis, not fixed terms, a price guarantee, a promised percentage return, or a timetable the market was obliged to meet. We will keep talking about where we want to go. Nobody is entitled to confuse ambition with a promise that getting there is inevitable.

I warned people this was highly risky, speculative, and capable of going to zero. A plan can fail. A community may not grow. Reserves are not a magic wand. Markets can refuse to cooperate. None of that makes it dishonest to tell people what you are trying to build and how you hope to build it.

The State offered purchaser accounts to support its theory of expected profits. Our brief addresses those accounts alongside the recorded warnings and cross-examination: Gamero agreed the figures were “hopes” rather than “promises or guarantees,” and Nickel acknowledged discounting an aspirational price target. Our position is that no reasonable expectation of profits from our managerial efforts was established. Hoping a commodity’s market price will rise is not the same thing. (Our brief, pp. 53–58.)

The risks were not buried after the fact

On cross-examination by our counsel, the record filled up with warnings and disclosures:

• “This is risky.”
• “Don’t buy more than you can afford to lose.”
• “Most crypto projects fail.”
• “We don’t promise you riches. We promise a shot.”
• TXC should be thought of more like gambling or a lottery ticket than a safe investment.

I testified that I gave these warnings constantly because I believed them. I still do. People can lose everything in crypto even when every participant is honest, every machine is real, and every coin is delivered. Markets do not owe us a happy ending.

The State did not deny that these warnings existed. Its response was that a warning cannot by itself cure an unregistered securities offering or an actual material omission. But first the State must establish there was a security and identify a real omission, not simply wave away the full context. This was not a presentation of guaranteed riches with the word “risk” hidden in four-point type.

Mulligan Mint: disclosed, disputed, and impossible to compress

A large part of my first-day testimony concerned the Mulligan Mint bankruptcy from more than a decade earlier. The State treated it as information a purchaser might consider important. I testified that I discussed it publicly, including what happened, what I did wrong, and what I learned. Video evidence showed those discussions occurred.

Some purchasers said they had not heard the bankruptcy discussion before buying. Our brief does not concede concealment from that statement. It sets out the public disclosures and argues that the information was available through ordinary diligence, that no disclosure duty was established, and that the State did not prove intent, materiality, reliance, or injury from nondisclosure. A purchaser’s recollection is evidence to evaluate—not a substitute for the required elements. (Our brief, pp. 30–48.)

There is also an uncomfortable symmetry. The State argued that my old bankruptcy mattered so much that its absence from a particular purchaser’s knowledge supported fraud. During the hearing, two purchaser witnesses were confronted with bankruptcy histories they had not volunteered. That does not make my history irrelevant. It does make materiality less simple than the Order suggested.

Correcting my own testimony

At the beginning of Day Two, I corrected a point from my prior testimony: for a period in 2024, BlockchainMint.com accepted credit-card payments connected to mining packages. That correction is in the record. Our brief still asks the judge to dismiss Blockchain Mint, MineTXC, and TEXITcoin for want of jurisdiction. Correcting the payment history did not concede that those names were separate legal entities. (Our brief, pp. 73–75.)

That moment did not get the drama of a hostile cross-examination, but it is part of the record I am proud of. Accuracy is not only something we demand when it helps us.

Day Two: The investigator and the Order meet each other

Phillip Fuselier takes the stand

Phillip Fuselier is an experienced TSSB investigator and Certified Fraud Examiner. He testified that he opened the investigation after hearing one of our radio advertisements. He reviewed websites, records, marketing materials, social media, financial materials, and approximately 90 recorded calls. He worked undercover. The investigation ran for almost a year before the Emergency Order issued.

That gave his testimony weight. It also made the omissions in the investigation more consequential.

Our counsel began cross-examination by looking for common ground. What followed was the cleanest sequence in the hearing.

The Order did not allege:

• that the mines were never built;
• that I embezzled purchaser funds;
• that purchasers failed to receive TXC;
• that commissions were not paid;
• that I promised to do something and simply did not do it;
• that I affirmatively lied or made a false statement;
• that I instructed anyone else to lie;
• that I refused to answer questions on the public calls;
• that I answered questions falsely;
• that I guaranteed profits;
• that I coerced purchasers; or
• that I assumed a fiduciary relationship with them.

Asked whether there was a contract creating a contractual duty of disclosure, Fuselier answered:

“There was no contract—none of these people had a contract.”

Our expert would later describe the arrangement as a service contract for accounting purposes, so that sentence has legal complications of its own. In the fraud cross-examination, however, the point was narrower: the investigator did not identify a fiduciary or contractual duty supporting the omission theory alleged in the Order.

The core representations were true

Counsel then walked through the factual representations reproduced in the Emergency Order.

A mining package entitled a purchaser to a specified amount of hash power as a percentage of the total pool. True.

That amount determined the purchaser’s percentage of daily TXC output. True.

Purchasers would receive their percentage daily. True.

The output was TXC. True.

People received those distributions. True.

Fuselier agreed that these were true representations. He also agreed there was no allegation that the allocated hash power was fictitious.

That exchange matters because the Order’s narrative depends on the reader experiencing the whole transaction as suspect. Under oath, the transaction itself became concrete: money purchased an allocation; the hash power existed; mining occurred; the promised output was distributed.

The false “never” statement—and the correction the State now requests

Paragraph 16 of the Order says:

“Investors never receive any mining hardware or control over mining hardware.”

Counsel asked Fuselier whether that statement was false. He initially described home miners as exceptions, then agreed that the absolute allegation was false because some purchasers did receive mining hardware.

At the hearing, Fuselier confirmed that the TSSB had not withdrawn the allegation. In its October 9 brief, the State now asks to modify the hardware finding to acknowledge home-miner recipients. That is a requested correction—not a correction already entered by the judge. (Enforcement Division brief, pp. 9–10.)

The State objected when counsel pressed the investigator on why a known false allegation remained in the Order, arguing that Fuselier did not control the legal pleading. The judge sustained that objection. That ruling was proper as an evidentiary matter: an investigator does not personally amend an agency order from the witness stand.

It does not solve the institutional problem. The agency learned the sentence was false and continued to let the public read it as fact.

The original absolute statement was false. The State now seeks a narrower finding. Our brief argues that the common computational work and reward formula also defeat its legal distinction between home and hosted mining. (Our brief, pp. 64–65.)

What the investigation did not do

Fuselier testified that the agency did not subpoena me before issuing the Order and did not ask for my side. He said the agency worried that if I knew regulators were “sniffing around,” I might abscond with assets or leave the country, based partly on the Mulligan Mint history and my criticism of government and the Federal Reserve.

Under follow-up questioning, he agreed there was no allegation I stole money in this case and no claim that I stole money and absconded in the Mulligan Mint matter.

The agency also did not subpoena respondent records before the Order, even though Fuselier agreed it could have. It did not verify every social-media identity used in the investigation; some could have been bots. It did not interview anyone who actually paid by check before treating the Danager Resources check detail as important. It did not speak with an identified person who said that detail would have mattered to the purchase decision.

None of those choices automatically invalidates the investigation. Agencies can investigate undercover. Emergency powers sometimes exist precisely because notice may change behavior. But emergency action should be built on verified facts proportional to the claimed emergency. Here, the press release spoke of immediate and ongoing harm while the Order alleged no missing or embezzled funds.

Naming a blockchain as a respondent

Fuselier agreed that TEXITcoin is a blockchain or digital currency, not a legally formed entity. He agreed a blockchain is not capable of being sued in the ordinary sense. He knew before the Order that TEXITcoin, MineTXC, and Blockchain Mint were not separate legal entities registered with the Texas Secretary of State, yet all were named.

He also agreed that the TEXITcoin website did not itself sell mining packages and that the MineTXC site was the place they were offered.

His explanation was that the names were collectively understood as connected parts of the TEXITcoin operation and therefore were named to reach what the public knew. That may explain the drafting choice. Whether it is legally sufficient is another briefing question.

It is also a revealing example of the agency’s approach: when the facts were precise, the Order preferred a broad collective label. Later, the State asked the judge to “strip away the labels.” The irony did not go unnoticed.

Disclosures the investigator already knew about

Both sides have now briefed the legal standard. Our brief argues that the required nondisclosure elements were not established; the State presses its competing interpretation. The judge has not decided between them.

• warned people the project was risky;
• said profits were not guaranteed;
• told people not to buy more than they could afford to lose;
• discussed the Mulligan Mint bankruptcy;
• discussed hardware failures and maintenance problems;
• discussed power problems;
• discussed security incidents; and
• identified people working on the operation.

The State’s answer is that the disclosures were incomplete, scattered, or not made in the right place to the right people. That is the omission case at its strongest. Our answer is that the Order painted intentional concealment while its investigator possessed hours of evidence showing the supposedly concealed subjects being discussed openly.

Both sides will brief the legal standard. The factual contradiction is already in the record.

The purchaser witnesses: real losses, mixed memories, and the problem of attribution

The State called five purchasers. Their testimony matters because securities law cares about the transaction’s economic reality, and a judge naturally wants to know what ordinary purchasers understood.

It also matters because these were human beings who lost money. I can disagree with their legal conclusions, challenge their memories, and point out contradictions without pretending their disappointment was fake. A falling market does not prove fraud. It does still hurt.

Marcus Hesse: risk experience and a refund condition

Marcus Hesse described experience buying, selling, trading, and staking crypto. Our brief says he bought two packages on Thanksgiving Day 2025 for roughly $1,990. He testified that he expected only daily TXC, held no ownership stake in an entity, and had never thought of buying cryptocurrency as a securities transaction. (Our brief, pp. 22–23.)

On cross-examination, he acknowledged emailing support with an offer to withdraw from participation in the case if he received a refund. That does not erase his testimony. It does create an obvious motive question: was he reporting fraud, negotiating a commercial dispute, or both?

His written declaration also contained legal language about an “expectation of profits from the efforts of others” that he acknowledged was not how he would naturally speak. The TSSB had prepared the declaration from his answers. That is common enough in legal proceedings, but the judge must separate the witness’s lived recollection from the lawyer-shaped vocabulary placed around it.

The State relies on portions of his account. Our brief relies on his understanding of what he bought and disputes that nondisclosure, reasonable managerial-profit expectations, or resulting injury were proved.

Charles Gamero: delivery admitted, hostility exposed

Our brief says Charles Gamero bought seven packages for himself, using other purchasers and TEXIT Rangers to make purchases on his behalf. He testified remotely on Day Two. He agreed that either exchange purchase or a mining package left him with a coin, and that the price figures on the calls were hopes rather than promises or guarantees. (Our brief, p. 23.)

Gamero acknowledged he received the TXC associated with the packages. He did not identify an express profit guarantee from me. He also admitted he could have asked more questions and did not.

Cross-examination revealed a Facebook post after the price fell in which he called me a vulgar name and joked about going to China to drag me back. The post showed obvious anger and gave our lawyers evidence of bias.

Then came an uncomfortable comparison. The State had argued that my old bankruptcy should have been disclosed to purchasers. Gamero had his own bankruptcy history, which he did not disclose to the friends and family he referred to TEXITcoin. He did not believe his omission was fraud.

That does not make the two situations legally identical. It does show how quickly “you did not tell me every old financial fact” can become a moral accusation only when money is lost.

Bret Hinson: a straightforward witness with a useful distinction

Bret Hinson bought a package in August 2025 and paid by Venmo; our brief says he had never heard of Danager Resources. He understood crypto was volatile, had seen the use-of-funds chart, and expected daily TXC—not MineTXC profits. The State cites other parts of his account for its disclosure theory; we dispute that the required elements were proved. (Our brief, pp. 23–24.)

On cross, he acknowledged the use-of-funds chart was publicly available. He also acknowledged receiving the daily TXC he was promised. Most importantly, he did not view buying a mine as equivalent to buying stock.

Hinson’s account matters because he understood both the risk and the commodity he expected to receive. Our brief does not concede a disclosure violation from his account.

Greg Block: guarantees from whom?

Greg Block described pressure and explosive price predictions from his friend and sponsor, Brad Varnell. Our brief identifies his first purchase as three mining seats on September 13, 2025. It also notes his acknowledgment that I did not conceal Mulligan Mint and answered questions, and that his demand letter relied on my public disclosures about management and liquidity issues. (Our brief, p. 24.)

Block attributed those strongest alleged promises to his friend. Our brief disputes the connection to respondents and challenges his credibility. I am not adopting third-party recruiting claims as promises I made. (Our brief, pp. 24, 47–48.)

The attribution problem is just as real. The strongest alleged guarantees came from Varnell, who promoted other coins and operated his own recruitment system. Under cross-examination, Block struggled to identify an actual guarantee from me. He conceded that the website contained substantial warnings, although he did not remember reading them. He also had thousands of prior crypto purchases and losses on other projects introduced by the same friend.

Block sent a demand letter and connected settlement or refund discussions to whether he would continue legal action or testify. Again, that does not erase a complaint. It affects motive and weight.

Then the hearing took a sharp turn. Our counsel confronted Block with records of a 1997 Chapter 7 bankruptcy matching his name, address, and Social Security number. Block repeatedly said he did not recall it. Counsel accused him of lying under oath and moved to strike his testimony.

Judge DeAngelo declined to strike it. She said she would give the testimony appropriate weight considering his claimed lack of memory. That was not a finding of perjury. It was a clear signal that credibility would be evaluated, not ignored.

I am deliberately leaving the more sensational accusation out of the headline. This case should not become a personal destruction contest. The relevant point is that one of the State’s witnesses had a significant credibility dispute that the judge expressly reserved for weighing.

Nike Nickel: the largest loss and the hardest testimony

Nike Nickel acquired mining seats and separately bought TXC on a public exchange. Our brief reports that he lost about $205,000 selling exchange-purchased coins he had acquired at an average price around $4, for roughly $0.70–$0.80. He still received daily TXC from his mining participation. Those are separate transactions. (Our brief, pp. 24–25, 52 n. 5.)

That is the largest personal loss described at the hearing. It deserves to be said plainly.

It is also important to separate the transactions. Most of Nickel’s money went into open-market TXC, which the State does not allege is itself a security. His mining packages and his exchange purchases were different routes to the same coin. Our counsel used that fact to argue that Nickel’s expectation was about TXC’s market price, not about receiving equity or a stream of company profits from a mining package.

The State used Nickel’s account to argue that he expected profits. Our brief answers with his acknowledgment of warnings, his treatment of aspirational price figures, and the distinction between open-market loss and a mining-package entitlement. (Our brief, pp. 52–58.)

The exchange was emotionally ugly because both things were true: I warned him, and he lost an enormous amount of money anyway.

His demeanor became part of the record. Judge DeAngelo repeatedly instructed him to answer the question without giving a speech. At one point, the hearing recessed so counsel could speak with him about following those instructions. That affects credibility, but it does not make his loss imaginary.

During his testimony, YouTube removed the livestream under its harassment-and-bullying policy. Our counsel suggested Nickel may have reported it. No evidence established who caused the removal. That belongs in the “strange courtroom day” file, not in a finding of fact.

Day Three: The case changes hands

By the third day, the State finished its purchaser testimony and rested. The hearing then shifted from stories about expectations to records, blockchain data, accounting, and physical mining.

This was less dramatic television. It may be more important to the decision.

Marianne Escalante: records instead of adjectives

Marianne Escalante authenticated records created and used in the ordinary administration of the program:

The State questioned limitations in the records. Our brief relies on the admitted records and Sotak’s independent verification of the blockchain and added computational resources. I am describing cross-examination, not conceding that the records or his conclusions were disproved. (Our brief, pp. 25–26, 60–61.)

The exhibits were admitted without objection. They supported a simple factual proposition: this was not a spreadsheet pretending to be a mine. Purchases were recorded, machines were acquired, hash power was tracked, commissions were paid, and physical units were shipped.

The State pressed data-entry limitations and discrepancies. Some records depended on users entering information. Labels changed over time. The administration was informal. Those are fair weaknesses. They do not erase the transaction trail.

Andrew Sotak: following the blockchain from the first block

Andrew Sotak was accepted without objection as an expert in forensic accounting and digital-asset and blockchain analysis. He is a CPA, Certified Fraud Examiner, and cryptocurrency-forensics specialist who has worked on matters involving the SEC, DOJ, CFTC, and FTC.

He did not simply read our website. His team extracted and reviewed the entire TEXITcoin blockchain transaction history from the first block through approximately May 2026. He reviewed the white paper, transaction data, mining records, sales records, public materials, and the actual relationship between network difficulty and hash power.

His basic findings were important:

• TEXITcoin is a Layer-1 proof-of-work blockchain;
• TXC is its native token and has utility on the network;
• TXC has the characteristics of a digital commodity;
• blockchain data showed real proof-of-work mining;
• network hash rate increased over time;
• the mining facilities and equipment looked like real cryptocurrency mining operations; and
• purchaser records showed additional mining resources being acquired and added as packages were sold.

When asked whether my technical testimony matched what he learned from reviewing the actual transactions, Sotak said yes.

That is not a character witness saying he trusts me. It is an expert comparing words to a public ledger.

“If by my understanding you mean my understanding after reviewing actual transactions of the TEXITcoin blockchain, then, yes.” — Andrew Sotak, Day 3, p. 148

What a purchaser actually received

Sotak described a standard package as an agreement for an allocation of potential hash rate within the MineTXC pool and a proportional daily payout of TXC. A purchaser’s share could be calculated:

purchaser’s allocated hash rate ÷ total allocated hash rate × the day’s mined TXC

The formula was publicly posted. The value received from the arrangement, in his account, was the daily TXC allocation. Purchasers did not receive stock, dividends, equity, or company profit.

He described the group as a mining pool: machines combine computational power to perform proof of work, and the pool allocates mined rewards among participants. The operator plugs in machines, connects them to power and software, and keeps them functioning.

His phrase for those activities was legally important:

“Ministerial functions of plugging the machines in, making sure they’re connected to the same mining pool, making sure that they’re connected to electricity.” — Day 3, pp. 152–153

The State treats physical maintenance as managerial because somebody has to do it. Our brief rejects that leap. Every seller works to produce or deliver a commodity. The question is whether the purchaser’s hoped-for profit depends on the seller’s entrepreneurial or managerial efforts—not whether a pump needs a person to repair it. Sotak described our pool-operator functions as ministerial. (Our brief, pp. 61–64.)

The accounting opinion: service contract, not equity

Under ASC 606 accounting principles, Sotak characterized the arrangements as contracts for services. That accounting characterization explains the exchange; it does not create stock, equity, company-profit rights, or a new investment instrument. Our legal brief describes the economic reality as a one-time purchase yielding a proportional daily allocation of the mined commodity. (Our brief, pp. 49–53.)

Fuselier’s “no contract” answer arose in the discussion of a contractual or fiduciary disclosure duty. Sotak’s service-contract characterization arose in accounting testimony. I am not turning those different uses into an admission of an enforceable investment interest or a duty the State failed to establish.

The economic point was that the buyer did not purchase an ownership interest. The operator owed a service and delivered a commodity generated by that service.

The State correctly responded that accounting treatment does not decide securities law. Calling something service revenue cannot end the legal analysis any more than calling it a “seat” can.

Home miners: the Order’s “never” was false

Sotak’s report contained striking figures.

Of 9,399 users eligible for one type of home miner, 91—about 0.97 percent—took physical delivery. Of 1,540 eligible for another, 143—about 9.29 percent—did so.

Respondents used those figures to show that hosted pooling was the economically rational service people wanted. Home mining brings residential electricity rates, heat, noise, maintenance, and scale problems.

The State used the low take-up rates to argue passivity. Our brief responds that purchasers supplied computational resources through the hash power they bought, whether they handled the overhead at home or paid the pool operator to handle it. Hundreds took physical delivery. Low take-up does not turn “never” into a true statement. (Our brief, pp. 60–65.)

The percentages describe delivery of particular home-miner types. They are not proof that hosted purchasers contributed no computational resources.

Capacity purchased versus capacity sold: get the numbers right

The capacity figures need to be stated correctly. Our brief says 29.9 terahash was purchased against 23.3 terahash sold over the life of the program, and that the website charted both figures publicly. The older version of this draft mislabeled 29.9 terahash as capacity sold; that was wrong. (Our brief, pp. 7–8, citing Day 3, pp. 196–197.)

Our brief explains why capacity was purchased ahead of sales: equipment took time to arrive and install, so I often ordered more than had been sold to have capacity on hand before allocation. Sotak independently verified additions of purchasers’ hash power over time. The investigator also agreed that the core package representations were true. (Our brief, pp. 7–8, 25–26, 60–61.)

The filed position is that purchasers contributed computational resources and received their daily TXC. Capacity purchased exceeded capacity sold in the figures our brief cites. That is not evidence of fictitious capacity or a conceded failure to deliver.

The SEC mining guidance

Our filed brief relies centrally on the SEC’s March 2026 interpretation, cited at 91 Federal Register 13724–25, and also cites the March 20, 2025 staff statement. The 2026 interpretation describes maintaining pool hardware and software, security, and reward payments as administrative or ministerial functions. Our brief argues that this guidance covers our arrangement. (Our brief, pp. 58–65.)

The State argues that purchasers paid money before capacity was assigned and generally did not supply preexisting rigs. Our brief answers directly: purchasers bought and contributed hash power; MineTXC acquired the computational resources on their behalf; the hardware performed the relevant work. Paying first and outsourcing hosting do not make the transaction an investment contract. (Our brief, pp. 60–64.)

Our brief also addresses the interpretation’s qualifications. Footnote 105 assumes pro rata rewards rather than interests purchased by non-miners or outsized allocations; our brief says the published formula gave purchasers only their pro rata share. Footnote 106 addresses passive reliance on an operator to provide resources; our brief says these purchasers provided the computing power they bought. Those are our arguments, not unresolved concessions that the exclusions apply. (Our brief, p. 64 n. 7.)

The filing also argues that Texas securities law is interpreted in harmony with federal law, giving this guidance substantial weight. That is stronger and more specific than calling it merely an interesting federal trend. It remains for the judge to decide the application. (Our brief, p. 60.)

What the new SEC answer says—and what it does not

SEC crypto-assets FAQ Question 2.3 is additional context for our broader point: continuing to secure, maintain, improve, or enhance a functional crypto system, or facilitate network effects, does not by itself amount to essential managerial efforts. Our filed mining argument is grounded in the March 2026 interpretation described above. I am not representing FAQ 2.3 as a passage our lawyers cited, or as a ruling in this case.

That is close to the heart of what I have been saying. TXC's value cannot be decreed by Bobby Gray. People have to mine it, hold it, spend it, accept it, build with it, and decide for themselves whether it is useful. Does every single person have to contribute equally? Of course not. But a community currency is not a one-man vending machine where you put in dollars and my managerial genius sends a profit back. A functioning network can still have builders, maintainers, advocates, and funded development without that fact alone turning its coin into an investment contract.

The package question still has to be analyzed on the record. Our brief does exactly that: it identifies the computational resources purchasers contributed, distinguishes that work from hosting logistics, addresses the SEC interpretation’s qualifications, and separates TXC’s market value from any company-profit entitlement. FAQ 2.3 supports the broader community-currency discussion; it does not replace that filed argument. (Our brief, pp. 49–65.)

Donation, investment, or paying for a service?

I have told people more than once that supporting this work could be a donation to me. That was not code for a guaranteed investment. When someone voluntarily backs a mission knowing the money can be lost entirely, the State should not simply erase their words and intentions because “investment” is a more convenient label. Likewise, when someone paid for hosted hash power and received mined TXC, the State must analyze that actual exchange, not substitute an imagined stock certificate.

A word alone does not settle it: writing “donation” on a payment does not make every transfer a gift, just as writing “security” in an Order does not make every mining service an investment contract. A security also does not require a paper contract, fixed percentage, or express guarantee. The real inquiry is the economic reality, the representations, and the governing law. Show me the promised return, the allegedly essential managerial effort, the actual reliance, the contract or course of dealing that supports the theory. Show me what was said about risk. Then let the evidence decide.

That is what this hearing was for. Did people hear “you will earn X by Y” as a term of the deal? Or did they hear “take a chance,” “highly risky,” “not an investment,” and “never put in more than you can afford to lose completely”? Some witnesses remember the former impression; the recorded warnings support the latter. A judge has to weigh both. The State does not get to define a security by how much it dislikes our ambition.

Steve Walsh: the man with the hard hat

Steve Walsh began as a purchaser and community participant, then became a paid member of the mining-operations team. That makes him both knowledgeable and potentially biased. The judge heard both facts.

He described joining the project, buying packages for family, attending the Tuesday and Thursday calls, hearing repeated risk warnings, and learning about Mulligan Mint in public discussion. He testified that he was never promised a profit and had no regrets.

He also described the physical mines in terms no marketing page could fake: L7 and L9 ASICs, immersion tanks, dielectric fluid, pumps, hoses, radiators, heat exchangers, transformers, container mines, security cameras, fencing, locks, alarm codes, and the red emergency-shutoff button he guarded from curious visitors.

The project, in his words, had become his hobby and his path. He worked on it seven days a week, even while traveling. That enthusiasm made him a warm witness. His current compensation—3,000 USDC per week—gave the State an obvious bias point.

Day Four: The physical mines and the difference between hosting and management

Real machines are good evidence—but not only for us

On the final morning, Walsh continued through videos and photographs of Conroe and Mansfield. The exhibits showed containerized immersion-cooled mines, racks of ASICs, transformers, electrical systems, and the work required to keep it all running.

That evidence destroyed any suggestion that the mine was imaginary.

The State used the same exhibits to emphasize maintenance. Our brief treats that maintenance as the ordinary ministerial work of a mining pool operator.

Cross-examination was methodical:

• Could an ordinary purchaser enter the site without staff-controlled access? No.
• Could a purchaser select the particular machine? No.
• Could a purchaser choose the location? No.
• Could a purchaser decide when it would operate? No.
• Could a purchaser turn an allocated 100 megahash on or off? No.
• Could automation pull a failed L9 out of an immersion tank? No.
• Could software repair a leaking hose, valve, fitting, or seal? No.
• Did an actual person have to perform those tasks? Yes.
• Did the purchaser depend on the operations team to keep the system working? Yes.

That was the State’s line of questioning. It establishes that people handle physical maintenance—not, by itself, that purchasers expected profits from essential managerial efforts.

“An ordinary purchaser does not have to travel to the centralized mine and perform that physical maintenance in order for his mining package to receive its allocation, correct?”

“Does not have to.” — Steve Walsh, Day 4, p. 30

The State relies on this exchange. Our brief explains why not having to travel to a hosted mine says nothing decisive about the legal source of the purchaser’s hoped-for gain.

Our answer is not to deny it. Our answer is that customers pay service providers precisely so they do not have to perform logistics. A person who pays a refinery to process ore, a warehouse to store a commodity, or a pool to host mining equipment depends on that provider’s performance without necessarily purchasing a security.

Our brief supports that distinction with commodity cases including Belmont Reid: an ordinary buyer can prepay an ordinary seller to produce and deliver a commodity while relying on the commodity market for gain. The seller’s labor does not automatically turn the sale into a security. (Our brief, pp. 54–55, 62–64.)

Victoria: maybe ten minutes

Walsh testified that the Victoria site had been operational for “maybe ten minutes” because the prior team selected the wrong transformer. Equipment remained locked up waiting for work.

The State points to that equipment problem as evidence of operational dependence. Our brief does not concede that an equipment failure converts ministerial hosting into investment management. It addresses operating problems as subjects we disclosed publicly. (Our brief, pp. 36–38, 61–64.)

There were real operating problems. Our filed answer to the concealment allegation is that outages, hardware issues, and related operating information were openly discussed. Describing those problems accurately is not admitting an intentional failure to disclose them.

Home miners and the judge’s question

Judge DeAngelo asked Walsh directly what benefit a home miner provided to the individual purchaser and to the project.

Walsh explained that distributed machines add geographic redundancy to the network. If one commercial site loses power, home miners can continue validating blocks. The individual receives the TXC associated with the qualifying package plus merge-mined Litecoin and Dogecoin, which may offset personal electricity costs.

The judge’s question does not tell us how she will rule. It shows she was focused on what the home-mining option actually changed. The State argued home miners were a tiny exception available only to people who had already acquired qualifying hash power. We argued they demonstrated that the package represented computational participation, not a corporate investment.

Our brief says the underlying mining work, price, TXC allocation, and formula were the same. Location and the person handling overhead cannot, in our argument, divide a commodity transaction from a securities transaction. (Our brief, pp. 64–65.)

The State’s closing: strip away the labels

Heintz promised a four-minute closing and came close. He did not try to brief every legal issue from the table. He gave the judge one sequence:

“Payment came first. Only after payment did Respondents assign mining power to that purchaser.”

He emphasized that before payment, the purchaser had supplied no ASIC, electricity, facility, software, or existing hash power. After payment, respondents supplied capacity from an operation respondents continued to run. Purchaser money advanced the operation as a whole. More than 90 percent never took possession of hardware.

His final economic description was clean:

“The purchasers provided money, Respondents provided and operated the mining enterprise, and the purchasers depended on Respondents’ continuing efforts for that enterprise to produce and distribute TXC.”

The State reserved registration, disclosures, and remedies for the written briefs. It asked the judge to uphold the Order with appropriate modifications.

That last phrase matters. After four days of testimony, even the State’s requested result contemplated modification.

Our closing: same input, same output

Perry framed the case as one of first impression with consequences beyond TEXITcoin. If the State’s theory makes hosted proof-of-work participation a securities offering, Texas mining businesses need to know where the line is.

He argued that a home miner and a hosted purchaser contribute the same economic input and receive the same output. One plugs in the machine personally; the other pays an operator to handle power, cooling, and maintenance. If that logistical choice alone flips the transaction from commodity service to security, the line is arbitrary.

“Same input, same output, but the State says one is a security and the other isn’t.”

He emphasized that every purchaser expected TXC and received TXC—not stock, company profit, or an ownership interest. Nickel had bought both TXC on an exchange and mining packages because both routes produced the same desired asset.

He also accused the State of pivoting mid-hearing to the resale or transferability of mining seats. No purchaser testified that the reason for buying was to resell a seat at a profit. The Emergency Order did not identify that theory. Perry called it a significant notice problem and a likely appellate issue if it became a basis for liability.

Then he turned to fraud:

“There is no evidence, it is undisputed, Bobby Gray never lied, ever.”

That was closing argument, not a judicial finding. But it rested on the investigator’s admission that the Order alleged no affirmative lie and on days of evidence that the subjects called “concealed” had been discussed publicly.

He asked the judge not to wait to reject the fraud allegations because every day they remained caused reputational harm. He asked that the false “never receive hardware” sentence be struck. He renewed the arguments about nonexistent named entities and the absence of a disclosure duty.

The State offered no rebuttal.

The scorecard after four days

There has been no ruling. This is not a prediction. It is my honest assessment of where the evidence left the major issues.

The fraud and deception allegations

What helps us:

• The lead investigator agreed the Order did not allege an affirmative lie by me.
• He agreed it did not allege embezzlement, missing money, fictitious mines, fictitious hash power, unpaid commissions, coercion, or guaranteed profits.
• He agreed the basic package representations—allocated hash power, proportional daily output, and delivery of TXC—were true.
• TSSB possessed our warnings and many operational disclosures before issuing the Order.
• The absolute statement that purchasers “never” received hardware was disproved.
• Witness testimony about guarantees was often attributable to independent recruiters rather than to me.

What the State argues—and we dispute:

• It says the disclosures were incomplete or failed to reach purchasers. Our brief documents the disclosures and rejects any proven duty, intentional concealment, materiality, reliance, or injury.
• It uses aspirational price language to argue expected profits. Our brief puts that language beside the warnings and distinguishes market hopes from promised managerial returns.
• It raises payment channels, operating names, and personnel. Our brief answers those allegations rather than conceding they were concealed.
• It points to purchaser losses. Our brief disputes that those losses establish injury from an alleged nondisclosure; Nickel’s large loss arose from open-market purchases. (Our brief, pp. 27–48, 52 n. 5, 53–58.)

Our filed position: The fraud allegations are unsubstantiated and frivolous. The required elements were not proved, the allegedly concealed subjects were disclosed, and the mining packages were not securities in the first place. We ask the judge to reject the fraud findings—not simply soften the adjectives. The State disputes our argument; there is no decision yet. (Our brief, pp. 27–48, 81–84.)

Whether the mining package was a security

What helps us:

• Real equipment performed real proof-of-work mining.
• Package sales were recorded alongside additions of mining resources.
• Buyers received a defined proportional share of mined TXC.
• They received no stock, equity, dividends, company profits, or governance rights.
• The output was the same digital commodity available through home mining or open-market purchase.
• Our expert classified the transaction as a service arrangement and described operator functions as administrative or ministerial.
• Federal mining guidance supports ordinary proof-of-work pool arrangements; the newer SEC crypto-assets FAQ 2.3 also challenges the notion that post-functionality maintenance and network growth alone are essential managerial efforts.
• TXC is a community currency: its adoption and price depend on the choices of miners, merchants, holders, builders, and users, not a promised return from one founder.

What the State argues—and we dispute:

• Paying before receiving capacity makes the arrangement an investment. Our brief answers that prepayment is ordinary in commodity purchases.
• Our hosting and maintenance were essential managerial efforts. Our brief calls them ministerial and identifies purchasers’ computational resources as the relevant work.
• Hosted purchasers were passive because they did not take rigs home. Our brief says they contributed the hash power they bought.
• Transferable seats supplied a separate profit-making interest. Our brief rejects that evidentiary theory and objects that it emerged during the hearing without fair notice. (Our brief, pp. 49–65, 69–71.)

Our filed position: The packages were commodity transactions, purchasers had no reasonable expectation of profits from our managerial efforts, and the SEC’s mining interpretation supports treating our operator functions as ministerial. TXC’s possible appreciation depended on its market, not a company-profit entitlement or our control over its price. These are independent arguments against the State’s classification, not a concession that hosting was investment management. (Our brief, pp. 49–65.)

The registration and fair-notice questions

If the package was not a security, registration theories fall with it. If it was, the case turns to who offered or sold it, what exemptions or defenses apply, what respondents existed, and what notice the law provided.

This appears to be a novel application. Our counsel said no prior case treats this particular proof-of-work package as a security. The State says novelty in technology does not defeat old law. We say an agency cannot impose a new boundary through an emergency fraud-laden order and then refine the theory at the hearing.

The transferability issue sharpens that concern. The State explored resale of “mining seats” as a continuing interest, but purchasers did not testify that resale profit drove their decision, and the Emergency Order did not clearly feature that theory. If the Proposal for Decision relies heavily on it, expect serious notice arguments.

Credibility

Bobby Gray: I answered the operational questions and corrected the payment-history point. Our brief relies on my testimony, the recorded disclosures, and corroborating records. The State can play clips; the judge must consider the record and governing standards, not a personality contest.

Phillip Fuselier: He was experienced and had reviewed an enormous amount of material. His concessions were consequently powerful. His explanation for not contacting us before emergency action, and his knowledge of contrary disclosures, are vulnerabilities for the agency.

Purchasers: They experienced genuine losses and disappointment. Several had motives, sophistication, attribution problems, or impeachment evidence the judge must weigh. None of that turns them into villains.

Andrew Sotak: His independent blockchain analysis confirmed real mining and additions of purchasers’ hash power. Our brief relies on that analysis and his explanation of ministerial pool work. The State’s cross-examination is not an admission that those conclusions were disproved. (Our brief, pp. 25–26, 60–64.)

Steve Walsh: His testimony documented real mining operations and routine overhead. The State questions his independence because he works with us. Our brief relies on his testimony about the mines and disclosures; it does not concede that maintenance proves investment management.

The briefs are filed: here is what we actually argued

We are no longer guessing what the briefs need to say. Our lawyers filed 84 printed pages of argument and conclusion, with the supporting record and authorities. The Enforcement Division filed its written closing too. Both are linked above. Here are the positions now before the judge.

1. A one-time purchase yielding TXC—not company profits

Our brief defines the economic reality plainly:

• A purchaser paid a one-time fixed price.
• Computational resources were purchased and contributed to the mining pool.
• The purchaser received a proportional daily allocation of TXC.
• The purchaser received no stock, equity, company-profit share, or ownership stake in MineTXC or the mines.
• Any hoped-for gain on TXC depended on the commodity’s market price, not a profit right attached to a mining seat.

That is the transaction our brief asks the judge to analyze. The fact that an operator does the hosting does not create a different economic entitlement. (Our brief, pp. 49–53.)

2. The relevant work was computational; hosting was ministerial

Purchasers contributed the hash power they bought. MineTXC acquired the computational resources on their behalf and handled the overhead. The hardware did the proof of work. Our brief argues that purchasing, powering, cooling, maintaining, securing, and connecting that hardware were ministerial pool-operator functions—not the essential entrepreneurial or managerial efforts Howey requires. (Our brief, pp. 60–64.)

The distinction is between relying on an ordinary seller for delivery and relying on a promoter’s management for investment profits. The March 2026 SEC interpretation and the commodity cases are central to that argument. We also address the interpretation’s pro rata and passive-resource qualifications directly. (Our brief, pp. 54–55, 58–64, especially p. 64 n. 7.)

3. Taking a miner home did not change the underlying transaction

Hundreds took delivery of home equipment. Our brief says home and hosted participants paid the same price, received the same TXC allocation under the same formula, and relied on the same computational work. Who handled the overhead and where the equipment sat were ministerial differences. (Our brief, pp. 64–65.)

Our argument is not that a few exceptions rescue an otherwise admitted securities offering. It is that the State’s location-based distinction does not change the economic reality—and that its absolute “never receive hardware” allegation was false.

4. No proven nondisclosure fraud

Our brief takes the State’s alleged omissions one by one: Mulligan Mint; assets, liabilities, and capitalization; Danager Resources; personnel and operating problems; security; and registration status. It identifies the disclosures and argues that the State failed to prove every element required for nondisclosure fraud. It also rejects application of the Texas Securities Act’s anti-fraud provisions because the packages were not securities. (Our brief, pp. 27–48.)

5. Fair notice—not a new theory halfway through the hearing

Our brief argues that neither the law nor the Order gave fair notice of this unprecedented classification. It separately objects to a theory about acquiring and reselling mining seats that surfaced during the hearing. The State must prove the case it properly brought, not turn a hearing into notice of a different case. (Our brief, pp. 66–71.)

6. No proved emergency, and no jurisdiction over a blockchain

Our brief argues that the State failed to establish immediate and irreparable public harm justifying this Emergency Order. The long undercover investigation, delivered coins, and absence of alleged stolen funds matter to that argument. (Our brief, pp. 71–73.)

It also asks the judge to dismiss TEXITcoin, MineTXC, and Blockchain Mint for want of jurisdiction: the blockchain and operating names are not separately suable entities. The State’s request to recast the respondent as Bobby doing business under those names is its proposed remedy—not our concession. (Our brief, pp. 73–75.)

Those arguments matter even apart from the securities classification. Emergency power and jurisdiction are not details an agency can assume into existence.

7. Set the Order aside; reject refunds and address frivolous allegations

Our brief asks that the Emergency Order be set aside in its entirety. It argues that refunds are not properly before the judge through this referral, that this Emergency Order is not the kind of enforcement order authorizing restitution, and that the State did not supply sufficient evidence to calculate or support the requested refunds. It argues for adverse findings on frivolous allegations, asks the judge to consider sanctions, and expressly reserves our right to seek sanctions and fees under the applicable standards. No sanctions or fees have been awarded. (Our brief, pp. 75–84.)

What the State asks for instead

The Enforcement Division asks the judge to recommend affirming the Order with limited modifications. It wants the respondent identified as Robert J. Gray d/b/a TEXITcoin, MineTXC, Blockchain Mint, and Danagger Resources—the spelling in its prayer. Our brief uses Danager Resources. I am preserving that distinction rather than silently treating the State’s naming request as something we accepted.

It asks for findings that the packages were investment contracts, that I sold unregistered securities and acted as an unregistered dealer, continued cease-and-desist relief, and fraud or misleading-practices findings “to the extent supported by the hearing record.” It also asks for refunds under Section 4007.108, subject to credits and administrative conditions. Those are requested findings and remedies, not findings the judge has made. (Enforcement Division brief, pp. 112–113.)

Its proposed modifications matter. They acknowledge that parts of the Order need to be conformed to the hearing record. They do not mean the State has abandoned its fraud case or agreed with us on securities. The parties’ positions remain sharply opposed.

The strange, human hearing behind the legal record

Four days of testimony included plenty of moments no brief will capture.

There was the first mining rig in my spare bedroom and then garage in McKinney, until Texas heat and household tolerance made that arrangement less charming.

There was the video where I asked whether we could object to my old haircut, followed by counsel’s willingness to stipulate that it was bad.

There were remote witnesses freezing mid-answer, the court reporter stopping unfamiliar mining jargon, two Zoom boxes both labeled “Bobby Gray,” and a livestream that vanished from YouTube during hostile testimony.

There was a judge patiently separating “hash” from “hash rate,” a witness describing the necessary credentials as a hard hat and good attitude, and lawyers arguing over whether admitting a clip meant everyone had to watch the entire internet.

There was also this answer when counsel asked whether the project was real and whether I worked on it every day:

“Every day. It’s the love of my life, one of them anyway.”

Counsel wisely promised not to send that page to my wife.

Those moments do not decide the case. They remind us that a legal record is built by imperfect people trying to compress technology, money, hope, mistakes, and law into numbered lines.

Where I stand after the hearing and the filings

I am not writing a victory lap before the judge decides. I am explaining the case we put on the record.

We were right to fight the fraud label

The mines were real. The blockchain was real. Purchasers received TXC. Commissions were paid. Risks and operating problems were discussed. The investigator agreed the Order alleged no affirmative lie and no missing or embezzled money. Our brief goes further than that checklist: it explains why the State failed to prove the required nondisclosure elements.

An agency with emergency power owes the public more care than the Order showed. “Never” should not remain when the agency knows “some did.” A blockchain should not be casually treated as a legal entity. Publicly documented risks should not be written out of the story so “concealment” reads more cleanly.

The TSSB could have asked whether this novel mining arrangement was a security without painting it as a sham. It chose a fraud-laden emergency narrative instead. I cannot testify to the agency’s private motives, but from where I sit it looks like they could not accept a third possibility: that something they did not understand could be risky and ambitious, yet neither a scam nor a security. That is my judgment of their conduct, not a finding about anyone’s state of mind. The hearing exposed the distance between the Order’s insinuations and the evidence.

The plan stays—and it was not a guaranteed return

“Rocket ship,” “sit back and enjoy the ride,” and “path to $16” were aspirations, not guaranteed terms. I am not sorry for having a plan. Our brief explains that the hoped-for path required adoption and market demand—not a promise that my managerial performance would generate a purchaser’s profit. The surrounding warnings matter. So does the absence of any company-profit right. (Our brief, pp. 53–58.)

Our brief documents the information we disclosed about the operating names, payment channels, finances, personnel, and the mining operation. I am not adding a new admission here that those subjects were concealed, that we owed a duty the State did not prove, or that somebody’s loss resulted from a nondisclosure.

The record includes downtime and equipment problems. Our answer is that those risks and problems were disclosed—not that every machine always worked perfectly. The State’s comparisons and characterizations remain disputed where our brief disputes them.

Hosted participants did not have to do the overhead themselves. That is what hosting is for. Our filed position is that they supplied the computing power they bought, the hardware performed the relevant mining work, and our work was ministerial. I will not turn the fact that somebody changes a hose into an admission of investment management.

The case matters beyond us

Texas says it wants Bitcoin mines, blockchain businesses, builders, and financial innovation. Hosted proof-of-work mining is not an obscure hypothetical in that economy.

Our brief argues that the SEC’s March 2026 mining interpretation already explains why normal pool administration is ministerial, and that Texas securities law is meant to be interpreted in harmony with federal law. It also demands fair notice before an agency imposes a new classification through an Emergency Order. The broader FAQ 2.3 discussion reinforces why builders improving a functional network should not automatically be treated as promoters promising managerial profits. (Our brief, pp. 58–71.)

Clear rules protect consumers better than surprise jurisdiction. They also let honest builders design compliant products instead of learning the boundary from a press release.

What happens next

Both sides filed their initial post-hearing briefs on October 9, 2026. Reply briefs are due October 23, 2026. Judge DeAngelo’s Proposal for Decision follows the briefing. The Securities Commissioner then acts through the statutory process to affirm, modify, or set aside the Emergency Order. A filing is not a decision. (Our brief, pp. 26–27.)

This article remains a draft for review. The briefs are now linked above, and the account has been aligned with the positions we filed. It will not be published or announced without my approval.

We have asked the judge to set the Order aside. The State has asked for affirmance with modifications. Read both filings. Nobody has to take my summary—or the State’s press release—as a substitute for the record.

Then we will wait.

Not quietly. Not carelessly. And not by pretending the difficult parts of the record do not exist.

The State must prove the legal and factual grounds for the Order. We have challenged those grounds with testimony, records, and written argument. That is what the hearing and the briefs were for.

In my view, the fraud label did not survive the record. Our filed brief explains why.

The securities question is now squarely briefed: commodity purchase and ministerial mining-pool work, or the investment contract the State claims it sees.

Now the judge decides. We are not conceding the State’s case while we wait.