Tech Billionaires Launch Erebor: A New Crypto-Friendly Bank to Fill Silicon Valley Bank's Void

Tech billionaires led by Palmer Luckey to launch new bank to rival SVB, FT reports

July 2 (Reuters) - A group of tech billionaires led by Anduril co-founder Palmer Luckey are launching a new crypto-focused U.S. bank to fill the void left by Silicon Valley Bank's collapse, the Financial Times reported on Wednesday, citing people familiar with the matter. The group also includes Peter Thiel's Founders Fund and Palantir (PLTR.O), opens new tab co-founder Joe Lonsdale, a major donor to U.S. President Donald Trump's 2024 campaign, the report said. Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed. The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application. The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York. According to the charter application, the bank will be led by co-CEOs Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle (CRCL.N), opens new tab. Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves. Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services. The bank aims to become "the most regulated entity conducting and facilitating stablecoin transactions", according to its charter application. Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said. Luckey, Thiel, Lonsdale and a spokesperson for Erebor did not immediately respond to Reuters request for comment. Reporting by Ateev Bhandari in Bengaluru; Editing by Pooja Desai Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Tech billionaires Palmer Luckey and Joe Lonsdale back Silicon Valley Bank rival

Palmer Luckey, the billionaire co-founder of military tech group Anduril, is preparing to launch a US bank intended to fill the gap left by Silicon Valley Bank serving start-ups, including cryptocurrency businesses. To be named Erebor, the bank would be backed by high-profile tech investors including Joe Lonsdale, the founder of venture capital firm 8VC and a co-founder of Peter Thiel's defence group Palantir, according to people familiar with the matter. Thiel's venture capital fund, Founders Fund, would also be among the investors, according to two people close to the matter. Like Anduril and Palantir, Erebor's name is a reference to JRR Tolkien's The Lord of the Rings. Erebor is the "lonely mountain" whose treasures are reclaimed from the dragon Smaug. Luckey and Lonsdale -- who were big donors to Donald Trump in the 2024 US presidential election -- want the bank to take over the niche once occupied by SVB as the go-to lender for riskier companies and cryptocurrency players that traditional banks might reject. Erebor has applied for a national bank charter in the US, a licence that allows a financial institution to operate as a bank. "The bank will be a national bank . . . providing traditional banking products, as well as virtual currency-related products and services, for businesses and individuals," according to the application, made public this week. Its target market would be businesses that were part of the US "innovation economy", in particular tech companies focused on virtual currencies, artificial intelligence, defence and manufacturing, the filing said. It would also serve individuals who work for or invest in these companies. It also planned to work with non-US companies "seeking access to the US banking system". Erebor's co-founders first discussed launching a bank after the collapse of SVB in 2023, according to a person close to the matter. SVB had been the main bank for US start-ups and their venture capital backers. Its assets were sold to First Citizens, which has since relaunched SVB, and a number of its bankers moved to HSBC in the US. But investors and executives complain about a gap in banking services for fledgling tech companies since SVB's demise -- with some start-ups struggling to get the same access to capital. Erebor said in the filing it would "differentiate itself" by working with customers that "are not well served by traditional or disruptive financial institutions, in particular with respect to insufficient access to credit". Cryptocurrencies known as "stablecoins", which are pegged to real-life assets such as the dollar, are expected to be a significant part of the bank's operations. The application states Erebor aims to be "the most regulated entity conducting and facilitating stablecoin transactions". Luckey and Lonsdale were not expected to be involved in the day-to-day management of the bank, according to people familiar with their plans. It will be run by co-CEOs Jacob Hirshman, who previously worked as an adviser at crypto group Circle, and Owen Rapaport, co-founder and CEO of digital assets software company Aer Compliance. Mike Hagedorn, former senior executive vice-president at New Jersey-based Valley National Bank, will be the bank's president. Its head office will be in Columbus, Ohio, with an additional office in New York, but it will offer digital only customer service, marketing all of its products and services via a smartphone app and website. Part of the application was submitted confidentially and has not been made public, such as details relating to its shareholders, equity structure and business plan. Luckey did not respond to a request for comment. Lonsdale confirmed he was a financial backer to the project but declined to comment further. Rapaport and a spokesperson for Thiel declined to comment. Hirshman and Hagedorn did not reply.

Oculus founder Palmer Luckey backs new crypto-friendly bank with tech billionaires

Forward-looking: As the regulatory landscape continues to evolve, the success of a new crypto-bank venture called Erebor will depend on its ability to secure federal approval and earn the trust of startups and investors. For now, Erebor represents a bold bet that the future of banking - particularly for tech and crypto - lies in a digital-first model. When Silicon Valley Bank collapsed in March 2023, shockwaves rippled through the startup world. For decades, SVB had been the primary financial partner for early-stage technology companies, venture capitalists, and crypto startups - businesses often considered too risky by traditional banks. Its sudden failure exposed a critical vulnerability in the innovation economy. Now, a new digital bank called Erebor is emerging to fill that void. The outfit is backed by a coalition of prominent tech billionaires including Palmer Luckey, co-founder of defense contractor Anduril and Oculus VR, and Joe Lonsdale, co-founder of Palantir, along with Peter Thiel's Founders Fund, and is positioning itself as a modern banking solution for the sectors SVB once served. The bank has applied for a national charter and plans to operate exclusively online, with its headquarters in Columbus, Ohio, and a secondary office in New York. Erebor will focus on serving technology-driven businesses and individuals in fields such as artificial intelligence, cryptocurrency, defense, and manufacturing, areas that have struggled to find reliable banking partners since SVB's collapse. The bank also aims to support individuals working in or investing in these industries, as well as international firms seeking access to US banking services. What sets Erebor apart is its embrace of digital assets. The bank plans to hold stablecoins directly on its balance sheet ,a move that could make it the first US national bank to do so. This approach is designed to meet the needs of crypto businesses while providing a regulated, compliant environment for stablecoin transactions, which have become increasingly important for cross-border payments and digital settlements. The bank will be led by co-CEOs Jacob Hirshman, formerly an adviser at stablecoin company Circle, and Owen Rapaport, co-founder of digital assets software firm Aer Compliance. Mike Hagedorn, a veteran of Valley National Bank, will serve as president. While Luckey, Lonsdale, and Thiel will provide strategic direction and financial backing, they are not expected to be involved in Erebor's day-to-day operations. Their presence, however, lends credibility and visibility to the venture, particularly among tech entrepreneurs still seeking stability in the wake of SVB's collapse.

Peter Thiel, Tech Billionaires to Form Bank for Crypto, AI Startups - Decrypt

Erebor has filed for a national bank charter with the Office of the Comptroller of the Currency. PayPal co-founder Peter Thiel and several other technology billionaires are banding together to spin up a financial institution that would fill the shoes of the ill-fated, crypto-linked Silicon Valley Bank, the Financial Times reported, citing sources familiar with the matter. Defense technology firm Anduril co-founder Palmer Luckey is leading the initiative to establish the commercial bank, called Erebor, with support from Palantir co-founder Joe Lonsdale and Thiel's Founder Fund, according to the report published on Monday. Erebor has filed for a national bank charter with the Office of the Comptroller of the Currency, a federal banking regulator, the FT reported. Much like SVB, Erebor aims to service venture capital-backed startups that have been turned away by traditional financial institutions, according to the publication. Those include technology companies focused on artificial intelligence, defense, manufacturing, and cryptocurrencies, according to the FT, which cited an Erebor filing. SVB was a large commercial bank that served a wide range of cryptocurrency firms, including BlockFi, Circle and Avalanche, as well as other venture-backed startups. It imploded in March 2023 due to its outsized investment in low-yield bonds and other financial missteps that rendered it unable to hold up in a bank run initiated by its tech-heavy clientele. Its collapse marked the second-largest failure in the U.S. banking system. Erebor will have two co-CEOs: Owen Rapaport, co-founder of software firm Argus, and Jacob Hirshman, a former Circle adviser, the FT reported. The report shows that Erebor plans to add stablecoins to its balance sheet, although it remains unclear which dollar-pegged tokens it would hold, according to the publication. The parties reportedly involved in Erebor did not immediately respond to Decrypt's requests for comment. A mountain in J.R.R. Tokien's fictional world bears the same name. Erebor's formation comes as digital assets are poised to boom under U.S. President Donald Trump, who has maintained close ties to the industry. Under Trump, Senate lawmakers have passed the Genius Act, a regulatory framework for stablecoins that is a major boon for the digital assets industry. And a market structure bill that would make it easier for crypto companies to operate stateside is expected to become law later this year. Meanwhile, the price of Bitcoin -- often used as a gauge of the cryptocurrency market's strength -- sailed to two all-time highs a few months after President Trump's inauguration. Promising activity in the crypto market and within the halls of Congress has fueled an uptick in mergers-and-acquisition activity across the industry as well as a crypto IPO boom.

Palmer Luckey, Peter Thiel, Joe Lonsdale Launch Erebor Bank For Startups, Crypto And Defense -- A Digital-Only Bet On The Post-SVB Era: Report - Palantir Technologies (NASDAQ:PLTR)

Defense tech billionaire Palmer Luckey is spearheading the launch of Erebor, a digital-only bank targeting startups, cryptocurrency businesses, and defense contractors left underserved after Silicon Valley Bank's collapse in March 2023. What Happened: The venture brings together a powerhouse of tech investors. Joe Lonsdale, founder of venture capital firm 8VC and co-founder of Palantir Technologies Inc. PLTR, confirmed his financial backing to the project. Peter Thiel's Founders Fund will also invest, The Financial Times reported, citing sources. Erebor has filed for a national bank charter with U.S. regulators, seeking to fill the financing gap left when SVB failed. The application, made public this week, states the bank will provide "traditional banking products, as well as virtual currency-related products and services, for businesses and individuals." The bank's target market spans companies in the "innovation economy," particularly those focused on virtual currencies, artificial intelligence, defense, and manufacturing. It will also serve individuals working for or investing in these sectors, plus non-U.S. companies seeking U.S. banking access. Stablecoins represent a key strategic focus. These digital currencies pegged to real-world assets like the U.S. dollar will form a significant part of operations. Erebor aims to become "the most regulated entity conducting and facilitating stablecoin transactions," according to the filing. Founders Fund did not immediately respond to Benzinga's request for comment. See Also: Wall Street's $100 Billion Payout Parade: JPMorgan, Morgan Stanley, Goldman Lead Capital Return Wave After Acing Fed's 2025 Stress Test Why It Matters: The timing reflects broader market conditions. SVB's assets were sold to First Citizens, which relaunched the brand, while many SVB bankers moved to HSBC's U.S. operations. Yet investors and executives report persistent gaps in banking services for emerging tech companies, with many startups struggling to access capital, according to the report. Co-CEOs Jacob Hirshman, former Circle adviser, and Owen Rapaport, co-founder of digital assets firm Aer Compliance, will lead daily operations. Mike Hagedorn, former senior executive vice-president at Valley National Bank, serves as president. Erebor will operate from Columbus, Ohio, with a New York office, offering purely digital customer service through smartphone apps and websites. The venture continues a pattern among the founders. Like Anduril and Palantir, Erebor references J.R.R. Tolkien's works, specifically the "lonely mountain" whose treasures are reclaimed from the dragon Smaug. Read Next: Elon Musk Is 100% Correct, Says Balaji Srinivasan: America Is 'Broke' And There Is 'No Fix' But Is It A Win-Win For Bitcoin? Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Mark Reinstein On Shutterstock.com PLTRPalantir Technologies Inc$131.570.68%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum98.80Growth97.34QualityNot AvailableValue2.74Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Palmer Luckey, backed by Palantir's Lonsdale, to launch crypto-focused bank

(Reuters) -Tech billionaire Joe Lonsdale said on Wednesday he is investing in a new crypto-focused U.S. bank being launched by Anduril co-founder Palmer Luckey that aims to fill the void left by Silicon Valley Bank's collapse. Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed. Lonsdale, who co-founded Palantir, said in an emailed statement to Reuters that he is a "proud investor" in the project. The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application. Like Anduril and Palantir, Erebor takes its name from J.R.R. Tolkien's "The Lord of the Rings" series. In the books, Erebor is the "Lonely Mountain", a fortress whose treasures are reclaimed from the dragon Smaug. The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York. According to the charter application, the bank will be led by Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle. Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves. Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services. The bank in a regulatory filing said it aims to be "the most regulated entity conducting and facilitating stablecoin transactions." The Financial Times first reported the news and said that the group of tech billionaires backing Erebor also includes Peter Thiel's Founders Fund. Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said. Luckey, Thiel, and a spokesperson for Erebor did not immediately respond to Reuters' requests for comment. (Reporting by Ateev Bhandari in Bengaluru; Editing by Pooja Desai and Maju Samuel)

Tech billionaires led by Palmer Luckey to launch new bank to rival SVB, FT reports

(Reuters) -A group of tech billionaires led by Anduril co-founder Palmer Luckey are launching a new crypto-focused U.S. bank to fill the void left by Silicon Valley Bank's collapse, the Financial Times reported on Wednesday, citing people familiar with the matter. The group also includes Peter Thiel's Founders Fund and Palantir co-founder Joe Lonsdale, a major donor to U.S. President Donald Trump's 2024 campaign, the report said. Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed. The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application. The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York. According to the charter application, the bank will be led by co-CEOs Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle. Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves. Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services. The bank aims to become "the most regulated entity conducting and facilitating stablecoin transactions", according to its charter application. Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said. Luckey, Thiel, Lonsdale and a spokesperson for Erebor did not immediately respond to Reuters request for comment. (Reporting by Ateev Bhandari in Bengaluru; Editing by Pooja Desai)