Erebor Bank Opens as First Trump-Era Charter, Targeting Crypto and Defense Sectors Left by SVB Collapse

Erebor Bank Opens as First Trump-Era Charter, Targeting Crypto and Defense Sectors Left by SVB Collapse

A new federally chartered bank opened for business last Sunday with an unusual mandate: serving the cryptocurrency, defense, and AI sectors that lost a key banking partner when Silicon Valley Bank collapsed in 2023.

Erebor—named after the fictional mountain fortress in Lord of the Rings—received approval from the Office of the Comptroller of the Currency after submitting its charter application in June 2025, making it the first de novo bank approved during President Trump's second term. The bank's launch comes as finance chiefs at startups and crypto firms continue navigating a fragmented banking landscape nearly three years after SVB's failure left many without traditional banking relationships.

The timing is notable for CFOs in high-growth sectors. Erebor is explicitly positioning itself to fill the gap left by Silicon Valley Bank, focusing on high-net-worth individuals, startups, and businesses in AI, manufacturing, defense, and cryptocurrency. The bank will also serve payment service providers, investment funds, and trading firms—precisely the client base that struggled to find banking partners after SVB's March 2023 collapse.

The bank has connections to prominent figures in the current administration's orbit, including Palmer Luckey, founder of defense contractor Anduril. Those ties may signal a more favorable regulatory environment for banks serving politically connected sectors, though the full extent of Erebor's backing remains unclear from available disclosures.

The opening comes amid continued turbulence in crypto banking infrastructure. Just days before Erebor's launch, a service called UnCash abruptly shut down after what it described as Mastercard terminating its card issuer relationships. UnCash blamed the card network for what it called a "clean, corporate guillotine," saying the move was "a death sentence" for a business that ran 90% of its cards on Mastercard's network. The service, which had been highlighted in compliance analyses for operating with minimal know-your-customer requirements, will refund users who can withdraw funds to external crypto wallets.

For finance leaders, Erebor's emergence raises questions about banking concentration risk that became painfully apparent during the SVB crisis. The bank's narrow sectoral focus—while potentially attractive to underserved clients—means companies in these industries may once again find themselves dependent on a limited number of specialized institutions.

The approval also signals potential shifts in OCC policy under the new administration. De novo bank charters have been notoriously difficult to obtain in recent years, with regulators maintaining heightened scrutiny following the 2008 financial crisis. Erebor's relatively quick path from application to approval—roughly eight months—suggests the regulatory environment may be loosening for well-connected applicants.

What remains unclear is whether Erebor has the capital base and risk management infrastructure to safely serve volatile sectors like cryptocurrency while also handling defense contractors and AI startups. Silicon Valley Bank's failure, after all, stemmed partly from concentration risk in a single industry experiencing simultaneous stress. Finance chiefs considering Erebor will need to scrutinize not just the bank's connections, but its balance sheet resilience.