Back in August, President Trump signed an executive order that sought to guarantee “fair banking for all Americans,” while claiming that financial institutions had in the past restricted some law-abiding US citizens access to their services because of their conservative politics or religious beliefs.
Included in Trump’s executive order was also the claim that financial institutions had restricted access to people or institutions that were engaging in “lawful business activities,” which many took as a reference to the crypto industry’s complaints about “debanking” actions that were allegedly being taken against digital asset firms.
It’s not surprising then that the Trump administration has been aggressive in creating a regulatory environment that’s much friendlier to companies in the cryptocurrency space, which some critics note also benefits the Trump family’s own growing crypto business.
But that new approach to regulation was on display again last week when the Office of the Comptroller of the Currency (OCC) said that it has given conditional approval to the de novo national bank charter application for Erebor Bank.
Erebor Bank was founded by Palmer Luckey, co-founder of military contractor Anduril, and Joe Lonsdale, co-founder of Palantir (PLTR) and head of venture capital firm 8VC. The bank is backed by Peter Thiel’s Founders Fund and crypto-focused firm Haun Ventures.
Luckey and Lonsdale were both large donors to Trump’s 2024 presidential campaign, while Thiel is a longtime ally of the president, going back to his first campaign for the White House in 2016.
Friends in high places
Erebor, which is a reference to the “lonely mountain” in JRR Tolkien’s The Hobbit, will be focused on the “innovation economy,” especially crypto firms, AI startups, and defense and manaufacturing companies. The Financial Times reported that cryptocurrencies are expected to be a significant part of its business.
Erebor is seen as filling a vacuum left by the dramatic collapse of the Silicon Valley Bank (SVB) in 2023. SVB’s business was heavily tied to servicing the startup and venture capital spaces.
Jonathan Gould, the Comptroller of the Currency, noted that Erebor was the first new bank granted preliminary approval under his watch at the OCC, which is the agency that regulates national banks in the US.
He said in a statement that he is “committed to a dynamic and diverse federal banking system, and our decision today is a first but important step in living up to that commitment.”
“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,” Gould added. “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’s application to the OCC was submitted by Adam Cohen, a partner at law firm Skadden. Cohen recently left the firm and joined the OCC.
A person close to Erebor insisted to the FT that the bank has received “no special treatment” from the OCC.
However, Business Insider reported in August that a fundraising memo sent out by Erebor predicted that federal banking regulators would approve its application in “less than six months” after it was submitted in June. The OCC approved it in four months.
"Palmer's political network will get this done," the memo said, according to Business Insider. The memo cited Luckey and Lonsdale’s "unique connectivity to banking regulators,” which includes Gould.
Erebor, which is backed by $275 million in capital, must still get approval from the Federal Deposit Insurance Corporation (FDIC), which it applied to in July. It normally takes about nine-and-a-half months for the FDIC to complete its review of applications.
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