Erebor, Palmer Luckey’s ambitious crypto-friendly digital banking startup, has received conditional approval from regulators to begin operations, federal officials announced Wednesday.
As The Post was first to report, Luckey, the 32-year-old tech mogul known for running the fast-growing defense company Anduril, is a major backer of Erebor — which aims to provide a stable option for Silicon Valley companies and tech entrepreneurs to park their money and cryptocurrency outside of traditional banks.
Tech investor Joe Lonsdale of venture capital firm 8VC is another key backer of Erebor, as is Peter Thiel’s Founders Fund.
Conditional approval from the Office of the Comptroller of the Currencyan independent arm of the U.S. Treasury, marked a crucial milestone for the Columbus, Ohio-based startup. It still needs to clear a few regulatory hurdles before it can open its doors – a process that will likely take several months.
“Today’s decision is also evidence that the OCC, under my leadership, is not imposing blanket barriers to banks seeking to engage in digital asset-related activities,” Comptroller of the Currency Jonathan Gould said in a statement.
“Permitted digital asset activities, like any other legally permitted banking activity, have a place in the federal banking system if they are conducted in a secure and robust manner,” he added.
A representative for Erebor declined to comment.
Luckey is listed as Erebor’s largest shareholder and member of its board of directors. Owen Rapaport, co-founder of crypto-surveillance company Aer Compliance, is listed as CEO of Erebor.
The startup’s unusual name refers to the mountain where the dragon Smaug stores his golden hoard in JRR Tolkien’s Lord of the Rings prequel, The Hobbit.
Sources previously told the Post that Erebor would manage cash and deposits in stablecoin, a class of digital currency whose value is directly tied to a “stable” asset like the U.S. dollar or gold.
Discussions about Erebor began shortly after the sudden collapse of Silicon Valley Bank in 2023 and accelerated as some tech investors complained that crypto and crypto-adjacent startups were being “unbanked” by traditional institutions under the Biden administration.
Luckey should not play a role in the day-to-day operations of Erebor.
President Trump – who enjoyed the support of Luckey and Lonsdale as well as many other tech and crypto executives during his 2024 campaign – has taken a much friendlier regulatory approach to the sector.
Luckey and his allies are also seeking an alternative to traditional fractional-reserve banking — in which banks deploy most of their customers’ deposits while keeping a relatively small amount in reserve at any given time.
Insiders say Erebor will focus on helping tech entrepreneurs grow their businesses rather than maximizing returns on deposits.
