Palmer Luckey’s ambitious crypto-friendly digital banking startup Erebor has received conditional approval from regulators to start out operations, federal officials announced Wednesday.
As The Post was first to report, Luckey, the 32-year-old tech mogul known for leading the fast-growing defense firm Anduril, is among the many chief backers for Erebor – which goals to goals to offer a stable option for Silicon Valley firms and tech entrepreneurs to park their money and cryptocurrency outside traditional banks.
Tech investor Joe Lonsdale of enterprise firm 8VC is one other key backer for Erebor, as is Peter Thiel’s Founders Fund.
Conditional approval from the Office of the Comptroller of the Currency, an independent branch of the US Treasury, marked an important step forward for the startup, which is predicated in Columbus, Ohio. It still must clear a number of more regulatory hurdles before it may open for business – a process more likely to take several months.
“Today’s decision can be proof that the OCC under my leadership doesn’t impose blanket barriers to banks that want to have interaction in digital asset activities,” Comptroller of the Currency Jonathan Gould said in an announcement.
“Permissible digital asset activities, like several other legally permissible banking activity, have a spot within the federal banking system if conducted in a secure and sound manner,” he added.
An Erebor representative declined to comment.
Luckey is listed as Erebor’s principal shareholder and a member of its board of directors. Owen Rapaport, the cofounder of crypto-monitoring company Aer Compliance, is listed as Erebor’s CEO.
The startup’s unusual name is a reference to the mountain where the dragon Smaug stores his hoard of gold in J.R.R. Tolkien’s “The Lord of The Rings” prequel “The Hobbit.”
Sources previously told The Post that Erebor will handle money plus deposits in stablecoin, a category of digital currency with value directly pegged to a “stable” asset just like the US dollar or gold.
Talks about Erebor began soon after the sudden collapse in 2023 of Silicon Valley Bank and accelerated as some tech investors grumbled about crypto and crypto-adjacent startups getting “debanked” by traditional institutions through the Biden administration.
Luckey shouldn’t be expected to play a task in Erebor’s day-to-day operations.
President Trump — who got backing from Luckey and Lonsdale in addition to many other tech and crypto executives during his 2024 campaign — has taken a much friendlier regulatory approach to the industry.
Luckey and his allies are also searching for an alternative choice to traditional fractional reserve banking – where banks deploy most of their client deposits while keeping a comparatively small amount in reserve at any given time.
Insiders say Erebor will deal with helping tech entrepreneurs construct their businesses versus maximizing returns on deposits.
Palmer Luckey’s ambitious crypto-friendly digital banking startup Erebor has received conditional approval from regulators to start out operations, federal officials announced Wednesday.
As The Post was first to report, Luckey, the 32-year-old tech mogul known for leading the fast-growing defense firm Anduril, is among the many chief backers for Erebor – which goals to goals to offer a stable option for Silicon Valley firms and tech entrepreneurs to park their money and cryptocurrency outside traditional banks.
Tech investor Joe Lonsdale of enterprise firm 8VC is one other key backer for Erebor, as is Peter Thiel’s Founders Fund.
Conditional approval from the Office of the Comptroller of the Currency, an independent branch of the US Treasury, marked an important step forward for the startup, which is predicated in Columbus, Ohio. It still must clear a number of more regulatory hurdles before it may open for business – a process more likely to take several months.
“Today’s decision can be proof that the OCC under my leadership doesn’t impose blanket barriers to banks that want to have interaction in digital asset activities,” Comptroller of the Currency Jonathan Gould said in an announcement.
“Permissible digital asset activities, like several other legally permissible banking activity, have a spot within the federal banking system if conducted in a secure and sound manner,” he added.
An Erebor representative declined to comment.
Luckey is listed as Erebor’s principal shareholder and a member of its board of directors. Owen Rapaport, the cofounder of crypto-monitoring company Aer Compliance, is listed as Erebor’s CEO.
The startup’s unusual name is a reference to the mountain where the dragon Smaug stores his hoard of gold in J.R.R. Tolkien’s “The Lord of The Rings” prequel “The Hobbit.”
Sources previously told The Post that Erebor will handle money plus deposits in stablecoin, a category of digital currency with value directly pegged to a “stable” asset just like the US dollar or gold.
Talks about Erebor began soon after the sudden collapse in 2023 of Silicon Valley Bank and accelerated as some tech investors grumbled about crypto and crypto-adjacent startups getting “debanked” by traditional institutions through the Biden administration.
Luckey shouldn’t be expected to play a task in Erebor’s day-to-day operations.
President Trump — who got backing from Luckey and Lonsdale in addition to many other tech and crypto executives during his 2024 campaign — has taken a much friendlier regulatory approach to the industry.
Luckey and his allies are also searching for an alternative choice to traditional fractional reserve banking – where banks deploy most of their client deposits while keeping a comparatively small amount in reserve at any given time.
Insiders say Erebor will deal with helping tech entrepreneurs construct their businesses versus maximizing returns on deposits.
