Erebor Bank Secures Conditional Federal Charter, Signaling U.S. Shift Toward Regulated Crypto Banking

OCC Grants Preliminary Approval to Peter Thiel-Backed Erebor Bank Amid Political Scrutiny and Tight Oversight

TL;DR

• The OCC granted conditional preliminary approval for Erebor Bank, marking the first new national charter under Comptroller Jonathan Gould.
• Erebor, backed by Peter Thiel and Palmer Luckey, plans to blend traditional banking with crypto and AI finance.
• The decision faces political backlash over regulatory fairness, yet signals a major step toward crypto’s integration into U.S. banking.

The Office of the Comptroller of the Currency (OCC) issued a conditional preliminary charter approval for Erebor Bank, National Association, on October 15, 2025, marking the first de novo bank approval under Comptroller Jonathan V. Gould. The bank, headquartered in Columbus, Ohio, becomes the first new federally chartered institution designed from inception to bridge traditional banking and digital asset markets. Gould emphasized that the approval followed the same rigorous standards applied to all charters, adding that the decision reflects the OCC’s position that “permissible digital asset activities have a place in the federal banking system if conducted in a safe and sound manner.”

Erebor Bank’s application outlines a dual business model that combines conventional banking services with virtual currency operations. It aims to serve technology companies, ultra-high-net-worth clients, and businesses operating in crypto, artificial intelligence, defense, and manufacturing. The charter filing describes ambitions to lend against nontraditional collateral such as cryptocurrencies and GPUs, facilitate stablecoin-based transactions, and handle dollar settlements for foreign banks. The plan situates Erebor as a direct response to the market gap left by the 2023 failures of Silicon Valley Bank, Signature Bank, and Silvergate, positioning itself as a regulated successor for the tech and crypto economy.

The bank has reportedly raised about $250 million in committed capital from investors including 8VC, Founders Fund, and Haun Ventures, and carries a private valuation exceeding $2 billion. Backers include billionaire entrepreneurs Peter Thiel and Palmer Luckey, who also serve as major shareholders and board members. Erebor’s internal documents circulated earlier in the year suggested that full regulatory approval could arrive within six months, noting that Luckey’s extensive political connections would help “get this done.” Financial disclosures show Luckey donated over $1 million to political committees in 2024, primarily to Republican candidates and groups.

The OCC’s approval came with extensive conditions. Erebor must maintain a minimum Tier 1 leverage ratio of 12% during its first three years and obtain written “no objection” from regulators before hiring any senior executives or altering its business plan. The charter requires the appointment of an external auditor, detailed risk management frameworks covering BSA/AML and cybersecurity, and a preopening examination before launch. The conditional approval expires if the bank fails to open within 18 months or complete its capital raise within 12. The OCC noted it could modify or revoke the approval if Erebor deviates materially from its stated business plan.

Board and management disclosures list Owen Rapaport as CEO and principal shareholder, Jacob Hirshman as chief strategy officer, and Michael Hagedorn as president. Other key figures include CFO Richard Grant, CCO Vlad Dubinsky, CRO Joshua Rosenberg, CTO Aaron Pelz, and independent directors such as Diogo Mónica and Michael Mosier. Residency waivers were granted for several directors, including Luckey and Rapaport, to operate outside Ohio. Gould underscored that the decision “does not impose blanket barriers to banks that want to engage in digital asset activities,” signaling a potential shift in tone from prior OCC leadership that took a more restrictive stance on crypto-related charters.

Political reactions have been immediate and polarized. Senator Elizabeth Warren criticized the move, arguing it “fast-tracked an approval that could set up another bailout funded by taxpayers and destabilize our banking system.” Critics also pointed to the involvement of Adam Cohen, a lawyer on Erebor’s application who later joined the OCC as chief counsel to Gould, as evidence of potential conflicts of interest. Supporters, however, view Erebor’s approval as a regulatory milestone showing that Washington is beginning to reconcile with digital finance after years of fragmented oversight.

The decision arrives amid broader policy shifts under the Trump administration, which has advocated a more open approach to crypto banking and stablecoin regulation. The approval coincides with the rollout of the GENIUS Act, a new federal framework for stablecoin issuers and custodial banking standards. Erebor’s entry could redefine how digital asset institutions operate under federal oversight, potentially influencing future applications from firms such as Circle, Coinbase, and Ripple that are pursuing similar charters.

Erebor’s emergence signals a new phase in the evolution of U.S. financial infrastructure — one where crypto-native firms begin to operate under the same rules as traditional banks. Whether it becomes a blueprint for responsible innovation or a flashpoint for regulatory pushback will depend on how rigorously its compliance promises hold up under federal scrutiny.

This article has been refined and enhanced by ChatGPT.