Real crypto mining is measurable. Here's how MineTXC's rewards actually get calculated, why that matters legally, and where the math doesn't add up — based on independent review of MineTXC's own published figures.
There are two normal, well-understood ways to participate in mining without running your own rig:
A platform rents you a specific, verifiable amount of hashpower for a set time on a named protocol. Everything — the hashpower deployed, the rewards it produces — is measured and tracked against what you paid for.
Independent miners combine their real, individually-owned hardware and split whatever the pool actually finds, in proportion to each miner's contributed hashpower. No hashpower, no rewards.
Both models tie your payout directly to real, verifiable computing power. That distinction is the crux of the legal question around TEXITcoin's Mining Packages.
According to independent analysis, MineTXC's own reward formula is:
Daily reward = (Your shares ÷ Total shares sold) × Total daily mine yield
Two things follow from that formula:
Because a single, permissioned operator produces every block and receives every reward, the "mine" isn't something you compete in — it's something you're allocated a slice of, regardless of whether your specific hashpower was ever plugged in.
Based on figures MineTXC itself has published, a July 2026 independent analysis found the network's actual mining capacity running at only about 29% of the hashpower it has sold to buyers — yet new buyers are credited rewards immediately, with no wait for their hashpower to actually exist.
Put simply: if payouts depended on real, dedicated hashpower the way legitimate cloud mining or pool mining does, a meaningful share of buyers would be earning nothing until the mine caught up to what had been sold. Instead, everyone is paid on schedule — which is only possible because payouts are a pro-rata allocation, not a mining result.
U.S. securities law (and Texas's own statute, Tex. Gov't Code § 4001.068) generally treats something as a security — an "investment contract" — when there is: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profit, (4) derived mainly from the efforts of someone else. This four-part test comes from the 1946 Supreme Court case SEC v. W.J. Howey Co.
Applied here: buyers pay money, into a shared pool, expecting daily returns, that depend entirely on MineTXC building, deploying, and running the mining infrastructure — not on anything the buyer does. That is the core of what the TSSB's cease-and-desist order alleges makes Mining Packages an unregistered security rather than a commodity purchase or a mining-service contract.
This is a live legal dispute. TEXITcoin's attorneys argue TXC is a digital commodity and the Mining Packages are not securities at all; the TSSB disagrees and is pursuing the case toward an August 17, 2026 hearing. Nothing here should be read as a final legal determination — read the timeline and the underlying filings and reach your own conclusion.
TXC's underlying blockchain is a modified copy of Litecoin (itself derived from Bitcoin) — an open-source codebase anyone can fork. There's no proprietary technology unique to the project.
Gray has said he now writes TEXITcoin's code himself using AI coding assistants rather than a dedicated development team — for infrastructure that holds other people's money. There's no public record of an independent security audit.
Independent reporting counts at least three to four admitted security incidents in roughly a year, including a prior "insider hack" Gray confirmed only after a year of investor questions, and a new exploit he acknowledged on camera in July 2026 without being able to say what system was touched, what it cost, or whether customer funds moved.
Independent reporting notes MineTXC's mining hardware also merge-mines Litecoin and Dogecoin simultaneously — rewards that reportedly go to Gray and, while now disclosed, are not shared with Mining Package buyers.
The TSSB's order and related coverage raise the founder's financial and litigation history — including a 2006 personal bankruptcy and an unresolved 2024 default judgment — as material information that should have been, but wasn't, disclosed to investors. See the timeline for specifics.
Since the cease-and-desist order, Gray has set up Iskander Networks — a Wyoming Decentralized Unincorporated Nonprofit Association (DUNA) built on essentially a copy of TEXITcoin's code, but mined in Dubai. Independent reporting describes cross-mining between the two networks, and notes Gray paid social-media influencers to promote the new project. It was not named in the original Texas order, and it repeats the same "trust the mission" messaging that preceded that order the first time.
Read this as a pattern, not a one-off. A new entity, in a new jurisdiction, running the same code and the same promotional playbook while the original entity remains under a fraud order, is exactly the kind of pattern regulators and journalists watch for. See the timeline for dates and sources.