Why the Texas Bullion Depository Offers Stronger Asset Protection Than Private Vault Storage

Why the Texas Bullion Depository Offers Stronger Asset Protections Than Any Private Vault in America

Note: US Gold Bureau’s parent company, Lone Star Tangible Assets, LP, is the contracted operator of the Texas Bullion Depository®, an agency of the State of Texas. Our operations are co-located with the Depository but kept separate and distinct, as this article outlines.

This article reflects our interpretation of the privacy and asset protection provisions of the laws which established and govern the Texas Bullion Depository, and why we believe the protections available to depositors are greater than any privately owned vault can offer. They are our opinions alone and may not reflect the views or opinions of the State.

This information is provided for general educational purposes only and does not constitute tax, legal, or investment advice. You should consult an attorney familiar with your particular facts and circumstances before making any decisions based on this information.

When people think about storing gold and silver, they typically think about security: guards, vaults, insurance.

Those things matter, sure. But the deeper question, one most investors never ask until it’s too late, is this: what happens to your metal when the world stops cooperating?

What happens if a lawsuit comes looking, another government comes knocking, or the company you trusted gets in over its head?

The Texas Bullion Depository (TxBD) was built with those questions in mind. To our knowledge, it is the only precious metals depository in the world available to the public that is also an official agency of a state government.

That status is not a technicality. It is the foundation of a set of legal protections that no purely private vault anywhere in the United States can offer, because those protections flow directly from the authority of the state itself. The Texas Legislature has enacted a framework of statutory protections, codified in Texas Government Code, Chapter 2116, that goes further than anything a private storage company can promise in protecting both your assets and your privacy. Here is what that could mean for you.

Vault Storage Is the Right Choice. But Not All Vaults Are Equal.

Let’s start with something we believe firmly: for most precious metals investors, professional vault storage is the right decision for the majority of their holdings.

While it makes sense to keep a small amount accessible at home or nearby for genuine emergencies, metals stored locally present real challenges:

• Home, office or safe deposit box storage is harder to insure adequately (and often costlier),


• It is less liquid when you need to transact quickly or can result in extra costs when you sell,


• And it creates a security risk for anyone who knows you own it, or when you need to transport it (as the tech world reminds us, security by obscurity is not a viable strategy).

A professional facility with proper security, insurance, and access controls addresses all those concerns in ways that home storage simply cannot match.

The question is not whether to use a vault. The question is which one, and why.

When you store precious metals with any depository, the legal relationship you are entering into is called a bailment. Under the Uniform Commercial Code, bailment is a transfer of possession, but not ownership, of property to another party for a specific purpose. You remain the owner; the vault holds your metal on your behalf and is legally obligated to return it on demand. The concept is simple. The execution depends entirely on the integrity and financial soundness of the company holding your assets.

Which brings us to how most people think about vault security, and where that thinking tends to fall short.

Every time Hollywood releases a caper film about a daring heist, another generation of investors file “vault risk” mentally under “guys with night vision rappelling through skylights.”

Physical security absolutely matters, and we take it seriously: vault and safe class ratings, perimeter controls, armed response, insurance coverage against theft. These are all legitimate questions to ask of any facility.

But when is the last time you actually heard of a professional crew pulling off an Ocean’s Eleven-style robbery of a commercial precious metals vault? We have spent decades in this industry. We have seen, and actively protect against, package theft, the occasional workplace integrity issue, counterfeit items, and various forms of financial scam. Those smaller risks are manageable and, when they do slip by, largely insurable.

No, the risk category that has caused the most significant documented losses for investors has not tended to come from outside the vault. It has come from the private vault operator itself.

When Your Bailor Bails

The cases below are ones we know well, and they share something important with several others like them. We include them not to frighten, but because understanding what actually goes wrong is the first step to making sure it does not go wrong for you.

Consider BullionDirect. It operated out of Austin, Texas — the same metro area where the Texas Bullion Depository operates today — and presented itself as a straightforward precious metals storage and exchange platform.

When customers placed storage orders, the company accepted their money and issued account confirmations. What it often did NOT do was purchase the underlying metal.

When federal investigators and auditors finally gained access to the vault, they found a handful of coins in an office safe. An estimated $30 million in customer funds and metal had vanished. The FBI identified more than 6,000 victims. The owner was convicted of wire fraud and money laundering and sentenced to ten years in federal prison.ⁱ

If that were a singular case of individual bad behavior, it might be easier to set aside. It is not.

Republic Metals Corporation, at the time one of the largest precious metals refiners in the country, filed for Chapter 11 bankruptcy in 2018 with roughly $174 million in assets against more than $265 million in liabilities — with over $86 million of that gap representing precious metal owed to customers. Those customers found themselves classified as unsecured creditors, behind the banks, facing the prospect of recovering pennies on the dollar. Creditors later alleged the company had been insolvent since at least 2012, operating for years on customer assets while the CEO and others allegedly used company funds for personal expenses. The facility was sold at auction. The proceeds did not cover the secured debt.ⁱⁱ

And if two were not enough: Northwest Territorial Mint, once billed as the largest private mint in the United States, collapsed in 2016 with $56 million in liabilities against $6.4 million in assets, having apparently run a Ponzi-like structure for close to a decade.

Tulving Companyⁱⁱⁱ. American Bullion Exchange^iv. The list is longer than most people realize. This is not a pattern of rare, unforeseeable events. It is what happens, with some regularity, in an industry segment that operates largely without external oversight.

What did all of these operations have in common? They were small private businesses, accountable to no one but themselves. Let us share just a few examples of this layered accountability approach.

When the business ran into trouble — and private businesses do run into trouble — the operators turned to the all-too-tempting assets available conveniently nearby: the metal that belonged to their customers. By the time anyone found out, the assets were gone, and the legal remedies were worth far less than what had been lost.

When selecting a depository, this is the risk that matters most. Not the heist. Not the natural disaster. The question is whether anyone with real authority is watching the people who hold your metal — and what recourse exists if the answer turns out to be NO.

Know Your Vault Provider

When you open an account at any vault, that institution asks a good deal about you. Know-Your-Customer regulations require it, as part of a framework designed to reduce money laundering, tax evasion, and the financing of criminal enterprises. That scrutiny is entirely appropriate.

We suggest you return the favor.

Before entrusting any company with your precious metals, ask the questions they will never volunteer answers to.

A name can be misleading. Companies in the precious metals industry have long sought to associate themselves with states, regions, or institutions that convey solidity and trustworthiness without actually having any affiliation with them.

Just because a vault bears the name of a state, a landmark, or a government institution does not mean it has any relationship with any of those entities.

Texas Bullion Depository is the only depository anywhere in the world accepting deposits from the public that is administered by a state agency – audited, regulated, and overseen by the Texas Comptroller of Public Accounts, an agency of the government of the State of Texas responsible for hundreds of billions in annual revenue collection and spending (Texas would be the 8th largest economy in the world if it were its own country).

A good way to spot the difference starts with the URL: TexasBullionDepository.GOV. That last three letters of that URL are critical.

When it comes to a purely private vault, the question is: who is watching, and what authority do they have to act to protect depositor assets? Is it really enough that some insurer sends in a contractor, what, once a quarter or once a year? A lot can change in a short time…

BullionDirect, Republic Metals, Northwest Territorial Mint – none had a regulatory relationship with any government. When their owners decided to help themselves to customer metal, there was no one positioned to stop them until it was far too late.

The TxBD Difference: Structural Accountability at Every Layer

The Texas Bullion Depository was designed from the ground up to answer that question at every level.

Rather than relying on a single company’s promise to honor its obligations, TxBD operates under a system of overlapping accountability that makes it, in our view, the most structurally sound storage arrangement available to any precious metals investor in the world.

The State of Texas Is Watching

The Depository is a Texas state agency, operating under the authority and ongoing oversight of the Texas Comptroller of Public Accounts, a statewide elected official directly accountable to the voters of Texas.

Your account records are maintained by that agency. Your holdings are subject to ongoing state audit. The books of the Depository operations are not the private property of a company; they are a matter of public accountability. (That does not mean public disclosure, however – client records are fiercely protected as we’ll detail in a moment.)

No private vault can offer this. Not because they lack good intentions, but because they lack the structural capacity to make it real. Only a government agency, enacted by legislation, has the resources and requirement to subject itself to the kind of ongoing, independent, legally mandated oversight that TxBD operates under.

Speaking of accountability, the state made the wise choice to separate its oversight from the day-to-day operations. Texas contracts with a private company to conduct operations, providing the best of detailed public accountability with operational efficiency and responsiveness of a private enterprise. Lone Star Tangibles Assets, LP (LSTA) – which is the parent company of the U.S. Gold Bureau – was selected by the state in a competitive RFP process to operate the Depository, a contract which as of 2026 has been twice renewed.

LSTA conducts the logistical operations of the vault, from shipping and receiving, including verifying metals as they come into or ship out of the facility, to data entry, accounting, and security. Then the state layers on additional levels of audit and monitoring on top, to provide the important “regulatory tension” born of differing teams reporting to separate organizations checking each other’s work, one accountable to its owners and another to its constituents.

Let us share just a few examples of this layered accountability approach.

Multi-Layer Auditing and Insurance

The State employs auditors who work within the vault facility, subjecting the assets and operations to continual and ongoing scrutiny. They pull random accounts for inspection and validation. They oversee and validate the results of regular full counts and reconciliation of assets. They review security footage. And they walk the facility, ensuring the private operator’s staff are held to the State’s high standards across the board and depositor assets are safe and always accounted for.

This is above and beyond the responsibilities of the operator and the burdens placed on both organizations by the private insurers – an overlapping chain of accountability and regulation designed to safeguard depositor assets in a way no private institution can offer.

TxBD also carries private insurance coverage on depositor assets through Lloyd’s of London, the preeminent specie insurance broker in the world, which covers the assets in the vault up to practical risk limits and at their real value, providing a meaningful financial backstop in the event of any covered loss. The insured assets are also subject to random audit by the insurers and their expert, independent teams as they see fit – an important third set of eyes on the holdings and operations of the Depository.

This same type and level of insurance is common for institutional vaults, but the combination of state-mandated audit, security, and ongoing oversight plus insurance of this scale is a level of layered protection that few if any private vaults can match.

For most private vaults, once the insurance runs out there is no one left to backstop claims but the company itself. And as our earlier examples demonstrated, owner impropriety is rarely a covered claim. Insurance is only as good as its ability to cover the kinds of events likely to actually happen.

Physical Security Built on Public Accountability

The physical security apparatus at TxBD was designed with the same philosophy of overlapping accountability. LSTA as the operator maintains a private security force on site, of course. Under the terms of the contract award and renewal process, the security team is incorporated and registered as a separate private security force under the laws of the State of Texas. Its team members themselves are often decorated veterans of elite law enforcement organizations from across the state, including certified firearms instructors, and former members of the region’s SWAT teams.

But even that team does not operate without oversight. The state employs its own law enforcement officers – also stationed on-site – whose role includes supervising the contracted security operation and serving as a separate check on physical security compliance. The two forces, private security and public law enforcement officers, do not report to the same chain of command, which means neither can quietly overlook the failures of the other.

TxBD’s combined state and private security forces have also become a meaningful part of the local emergency response community in the Austin area, regularly conducting joint training exercises with local first responder agencies to sharpen response protocols. Some of its security staff are even themselves certified firearms instructors for Texas law enforcement agents.

An IRS-Designated Custodian

The state did not stop at its own oversight. It required its operating partner to meet an additional standard of accountability. LSTA is one of a small number of IRS-designated non-bank trustees and custodians in the United States, a status the IRS grants only to entities that meet strict criteria for financial responsibility, experience, and operational soundness.

Very few precious metals companies of any kind appear on that list. The requirement that TxBD’s operator hold that designation means the Depository is operated to standards set not by one operator for itself (as is the case with most private vaults), not by a self-certifying industry trade group (like some of the larger ones who work closely with Wall Street), but by both the State of Texas and the U.S. federal government.

Independent IRA Custodian Partnerships

For investors holding precious metals within a self-directed IRA – a type of retirement account which can hold physical precious metals with the same tax benefits of a brokerage IRA or workplace 401(k) plan – LSTA currently partners with three of the leading independent IRA custodians in the country. These are regulated financial institutions subject to their own state or federal banking regulators and IRS oversight. Their presence in the custody chain means an additional independent check on your assets, another party with legal obligations to you, and another point of audit that would surface any discrepancy between what TxBD reports and what is actually on hand.

Pricing That Reflects the Value

None of this, remarkably, comes at a premium price.

TxBD’s rates are industry-competitive and in many cases well below those of private commercial vaults that can offer only a fraction of the accountability infrastructure described above.

Nor is it cheaper to store at home, properly. Insuring precious metals stored at a private residence or business location typically costs between 0.75% and 2% of value annually in insurance premiums – a significant premium over vault storage rates. And that is before any cost for physical security like safes, security cameras, alarm systems or other measures to help protect both your property and your family from the risks associated with holding such high value assets on site.

We are not suggesting that the lowest price is the right benchmark. We are suggesting the opposite: if a vault is offering rates dramatically below the market, it is worth asking what they are skimping on, or what risks they are quietly betting against to make that possible. Economies of scale have their limits. Beyond those limits, you do get what you pay for.

You will see one continuous theme repeated throughout the design of TxBD: checks and balances, at every layer, ensuring that all parties hold up their responsibilities to depositors. Not the mere promises of a private business that it will never cross a line it has every financial incentive to approach. We believe it was precisely this risk, the risk that history has shown is the real one, that caused the State of Texas to take up the design of this institution so carefully, and to build so many overlapping protections into the law that governs it.

Your Assets Are Yours, Not the State’s

When introducing a state government into the custody picture, it naturally raises a question worth addressing directly: can Texas itself make a claim on your metal? The answer is an emphatic no, and the Legislature said so explicitly.

Section 2116.004 of the Texas Government Code states that deposits, account balances, bullion, specie, and related assets held at the Depository are “not available for legislative appropriation.” That is not a policy preference or an administrative guideline; it is a statute. Texas lawmakers have legally bound the state’s own hands. Your metal cannot be swept into a state budget shortfall, redirected for state purposes, or otherwise treated as a public asset.

The law goes further. Subsection (b) provides:



The word “exclusively” is not decorative. It means the one and only lawful use of your assets is to fulfill the Depository’s obligations to you. There is no other category. This is a level of statutory commitment that no for-profit storage company can match.

Texas Fiercely Protects Your Privacy

A second major advantage, and one that is easy to overlook until you need it, is what Texas law says about your account information.

Section 2116.027 of the Government Code establishes that all records relating to individual depository accounts and account holders, “including current, former, or prospective depository account holders,” are confidential and exempt from disclosure under the Texas Public Information Act.

What does that mean in practice? It means that a private plaintiff’s attorney, a foreign government, or even the attorney general of another state cannot simply send a demand letter to TxBD and expect your account records to come out the other side. Texas law does not permit the release of that information, and as a state agency, TxBD carries the full weight of Texas sovereign authority in resisting such demands.

Consider a concrete example: suppose you are a defendant in civil litigation in another state, and opposing counsel wants to know what you own. They can subpoena a private vault, and that vault, a private company subject to the courts of any jurisdiction where it does business, will likely comply rather than litigate. TxBD, by contrast, is a Texas state agency. Compelling a Texas state agency to respond to process from a private party or a foreign jurisdiction is not a simple task, and under Texas law, the records are confidential to begin with. Statutory confidentiality combined with state sovereign authority is a shield that simply does not exist at any private vault.

The State Has Made Clear It Will Fight for Your Assets

Beyond privacy, Texas has built into Chapter 2116 an explicit declaration of how the state will respond if anyone attempts a large-scale seizure of precious metals assets held at TxBD, whether that is another government, a quasi-governmental body, or an entity acting at their direction.

Section 2116.023 provides that any purported confiscation, requisition, seizure, or attempt to control depositor assets, if made (our emphasis added):



This provision was written with history in mind. In 1933, President Roosevelt issued Executive Order 6102, compelling Americans to surrender their privately held gold to the Federal Reserve. That kind of broad, emergency-based action against precious metals ownership, an order directed at an entire asset class rather than any individual, is precisely what Section 2116.023 addresses. Under Texas law, any such order directed at TxBD depositor assets is declared a legal nullity from the moment it is issued.

And Texas does not just declare that and walk away. The 2019 amendments to the law (H.B. 2458, 86th Legislature) added a mandatory escalation provision: TxBD is required to refer any such attempted action to the Texas Attorney General, bringing the full legal resources of the state to bear in defense of depositor assets.

A private vault would be hard pressed to deny another state or a civil action. And any fight it did try to put up would be on its own dime.

One Limit Worth Understanding: Federal Authority

We believe in telling you the full picture. Under the Supremacy Clause of the U.S. Constitution, federal law is the supreme law of the land. A valid federal court order or federal law enforcement action cannot be nullified by a state statute.

However, if federal authorities came knocking at TxBD, even with a proper federal legal process, the story would certainly be much different than if it happened at a private vaulting facility.

That’s because any such request that comes to the Texas Bullion Depository would ultimately be answered by none other than the Texas Office of the Attorney General (OAG). And, while we cannot speak to the motivations of the OAG, or its then current elected leadership, we believe – given Texas’ longstanding history of fiercely protecting its rights as a state and the freedom and security of its constituents – that the office would be compelled to act in defense of Depository Account Holders and fight any release of records or seizure of assets they believed to be unconstitutional taking. If nothing else, the request and response would be a matter of public record.

And, while the battle is being fought in federal courts (a process that takes months at a minimum, but usually years) we suspect many asset owners would likely take the opportunity to withdraw their assets before any federal court order forced the State of Texas to comply with federal law.

On the other hand, should a federal agency overstep its authority in pursuit of private vaulting records or assets, we suggest you ask whether a private institution would put up a fight... or just quietly comply. Yes, U.S. history is dotted with examples of private parties who have held their own in such cases, forging new precedent that underpins the rule of law which is held in such high regards globally. But it is also littered with many many more examples of quiet compliance – one only need to look at mass surveillance through telecom and Internet companies for the leaked examples we know of.

We can think of few other institutions who have stood more firmly for and been willing to fight more fiercely in defense of the rights of states under the constitution than the State of Texas.

It is also worth noting that geography alone is no answer to the question of U.S. federal overreach, either. In recent decades, we have all watched as some of the largest and most politically connected financial institutions in the world – institutions with legal teams and lobbying resources that dwarf any private vault’s – ultimately comply when the U.S. government came in search of customer information. When the U.S. Department of Justice came calling at major Swiss banks demanding customer account data, for example, those institutions eventually provided it, rather than risk losing access to the U.S. banking system or face criminal charges against their U.S. subsidiaries. If that kind of leverage works on global financial giants, it will work on any private vault.

No contract, no offshore address, and no marketing promise changes the reality of both the legal power and global influence of the U.S. federal government. If your goal is to hide assets from their prying eyes, no vault worldwide can promise absolute privacy (not even the one in your home should you insure your assets, have bought them from a legitimate dealer, had them shipped to you, etc.)

But here is the critical point: Texas has used every conceivable legal tool available to it, as a state government with constitutionally recognized authority within the U.S. federal system, to make clear that it will resist any action against depositor assets right up to that line and has expanded that legislation over time.

No private company can say the same, because no private company has those tools. Private vaults offer only the protections of contract law and the principles of the Uniform Commercial Code, rights that are costly to defend and worth little when the assets themselves are gone. Texas offers the full force of state law, state sovereignty, and a government with both the authority and the stated will to fight to protect against federal government overreach.

The Bottom Line

If you want to store your precious metals in the United States, the country with the strongest rule of law in the world, and within that in Texas, a state with an unmatched tradition of defending individual rights and property, the Texas Bullion Depository offers something no private vault can: a state institution built on overlapping layers of accountability, backed by statutory protections written into law, operated by a partner subject to federal and state oversight alike, and secured by a dual-force security structure and tri-party audit which answer to the state itself.

Not just a vault. A state institution designed from the ground up with a legal mandate to hold the line for its depositors, protecting consumers and their assets.

Texas Government Code, Chapter 2116, enacted by the 84th Texas Legislature (H.B. 483, 2015) and amended by the 86th Texas Legislature (H.B. 2458, 2019)^v. The above represents our general understanding of these provisions and their implications. This is not legal advice. Consult qualified legal counsel for advice specific to your situation.