Palmer Luckey’s new banking venture has just received conditional approval from U.S. regulators to serve cryptocurrency and AI companies, and the news is already making headlines. Erebor, the Columbus, Ohio-based institution, secured approval from the Office of the Comptroller of the Currency (OCC) on October 15, 2025. The bank represents a significant step for digital asset firms that have struggled to find traditional banking partners willing to work with them.
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Erebor Crypto Bank Gains Approval Amid Rising Market Uncertainty
Fast-Track Regulatory Green Light Raises Questions
Palmer Luckey‘s crypto approval came in just four months, which is unusually fast for this kind of regulatory clearance and has spearheaded numerous significant debates among industry observers. Comptroller of the Currency Jonathan Gould announced the decision and made it clear this was significant for his tenure at the OCC, establishing a new precedent for digital asset banking approvals.
Gould stated:
“Erebor is the first de novo bank to receive a preliminary conditional approval since I arrived at the OCC. I am 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.”
Erebor still requires a few months of compliance and security tests before it can commence its business. It is now casting doubts on the fast track, particularly with the political links of Luckey. According to a fundraising memo dispatched by Erebor, Palmer will do so through his political contacts.
Palmer Luckey, the co-founder of military contractor Anduril Industries, started this year the bank. Luckey has a net worth of $3.6 billion at the date of writing (Forbes) and he had the idea when Silicon Valley Bank failed in 2023.
Tech Giants Back Palmer Luckey’s Banking Venture
The new venture has support from prominent Silicon Valley figures. Joe Lonsdale, who co-founded Palantir Technologies, serves as Erebor’s co-founder. Peter Thiel, another Palantir co-founder, is also backing the bank.
Luckey donated over $400,000 to President Donald Trump in 2020, and both he and Lonsdale were major contributors to Trump’s recent campaign. The name Erebor comes from J.R.R. Tolkien’s The Lord of the Rings series, referring to the “Lonely Mountain.”
Gould also defended the OCC’s stance on digital assets in his statement:
“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. 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.”
Political Backlash and Industry Impact
Sen. Elizabeth Warren says the approval of Erebor Bank is a classic example of regulatory decisions that could destabilize the banking system. She warned it risks setting up “another bailout funded by American taxpayers.”
Palmer Luckey’s bank joins several other firms pursuing banking licenses for digital assets, including Stripe’s Bridge, Coinbase Global, and Checkout.com. The move addresses an ongoing problem for cryptocurrency companies, which have historically found it difficult to establish relationships with traditional financial institutions.
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Owen Rapaport, an Erebor co-founder, declined to comment when reached by Bloomberg. The bank now faces the task of completing its remaining compliance requirements before it can begin operations in the coming months.