A bank backed by two GOP megadonors and tech billionaires has gotten approval from the Trump administration.
Erebor Bank, an Ohio-based firm made to provide services for cryptocurrency, artificial intelligence and defense-based companies, has surpassed regulatory approval from the Treasury Department’s Office of the Comptroller of the Currency for the formation of a national bank charter.
The bank is backed by leaders of two major military defense contractors: Peter Thiel of Palantir Technologies and Palmer Luckey of Anduril. Both companies have partnered with the Trump administration and their leaders have contributed to multiple of President Donald Trump’s election campaigns.
The bank is attempting to capture the digital asset-focused clientele once served by Silicon Valley Bank, which collapsed abruptly in 2023. These clients have struggled to secure financial services from mainstream institutions, but the administration has signaled optimism for loosening those regulatory barriers.
“Today’s decision is also proof that the OCC under my leadership does not impose blanket barriers to banks that want to engage in digital asset activities,” Comptroller of the Currency Jonathan Gould said in a press release. “Permissible digital asset activities, like any other legally permissible banking activity, have a place in the federal banking system if conducted in a safe and sound manner.”
Erebor has raised $225 million to fund its operations, according to Crunchbase. In addition to Thiel and Luckey, it also received funding from Joe Lonsdale, co-founder of venture capital firm 8VC, among other prolific angel investors in Silicon Valley.
Erebor aims to promote and fund digital asset activities, such as cryptocurrencies and other forms of digital payment.
The bank wants to focus its business on offering lending and depository services not only to a curated group of companies, but also to “ultra-high-net-worth individuals who utilize virtual currencies,” according to its bank charter application.
Though it aims to poach the new and coming firms expanding the AI and crypto space, Erebor is employing a different strategic approach from SVB, shaped largely by the current volatility of the economic landscape.
The bank’s customers can make payments using stablecoins, which are cryptocurrencies tied to fiat currencies such as the U.S. dollar, though it does not plan to issue its own, according to sources interviewed by The Wall Street Journal.
It’s investing in short-term Treasury securities and other highly liquid government bonds, which can be quickly sold with minimal loss in value, making it a safer choice amid ongoing fluctuations in interest rates. It will also lose the luxury and VIP perks SVB clients used to receive, making it less of a social club, Luckey told The WSJ.
The bank’s approval hasn’t come without controversy, with Massachusetts Senator Elizabeth Warren stating the move will “cater to the financial whims of Silicon Valley billionaires.”
“In a free market, credit flows fairly to businesses because they can use the money productively, not to the President’s cronies because of their political connections,” Warren said in a statement. “Trump’s financial regulators just fast tracked an approval of this risky venture that could set up another bailout funded by American taxpayers and destabilize our banking system.”
