New Bank Erebor Opens Targeting AI and Crypto Firms as UnCash Crypto Card Service Collapses

A new federally chartered bank focused on serving technology startups and cryptocurrency firms opened for business on February 8, marking the first de novo bank approval under the Trump administration's second term—even as a crypto-linked payment service abruptly shut down citing pressure from Mastercard.

Erebor, named after the fictional mountain fortress in "The Lord of the Rings," received its charter from the Office of the Comptroller of the Currency after submitting its application in June 2025. The bank's launch comes nearly three years after the March 2023 collapse of Silicon Valley Bank, which left a persistent gap in banking services for venture-backed technology companies and cryptocurrency businesses that many traditional banks have been reluctant to serve.

The timing carries particular significance for CFOs at fintech and crypto companies, who have faced mounting challenges securing basic banking relationships. Erebor's stated focus includes high-net-worth individuals, businesses and startups in artificial intelligence, manufacturing, defense, and cryptocurrency, as well as payment service providers, investment funds, and trading firms. The bank has connections to prominent figures in the current administration's orbit, including Palmer Luckey, founder of defense contractor Anduril.

The bank's opening coincided with turbulence elsewhere in the crypto payments sector. UnCash, a service that offered cryptocurrency-linked payment cards, announced it was shutting down just one day after being mentioned in an analysis of compliance gaps in crypto card programs. The company blamed Mastercard for what it called a "clean, corporate guillotine," saying card issuers had abruptly terminated their relationships.

"Given that 90% of our cards ran on the Mastercard network, this isn't a minor inconvenience—it's a death sentence," UnCash stated. "And frankly, we're done pretending we can fight Goliath with a slingshot made of good intentions." The service, which had been described as offering "no KYC" (know-your-customer) verification, said it would refund users and allow them to withdraw funds to external crypto wallets.

The contrasting fates of the two companies underscore the divergent paths available to financial services targeting the cryptocurrency sector. While UnCash operated through partnerships with existing card networks and faced sudden termination, Erebor pursued the lengthier but more durable route of obtaining a federal bank charter, which provides direct access to payment systems and regulatory clarity.

For finance leaders at technology companies, Erebor's approval signals a potential easing of the banking access challenges that have plagued the sector since SVB's failure. However, the UnCash shutdown serves as a reminder that partnership-based models remain vulnerable to abrupt termination when compliance concerns arise or network operators reassess risk tolerance.

The question facing CFOs is whether Erebor's charter represents the beginning of a broader regulatory shift toward accommodating crypto and AI businesses, or whether it remains an isolated approval in an otherwise restrictive environment. The answer will likely depend on how the OCC approaches subsequent charter applications and whether other regulators follow suit in reducing barriers to banking access for technology firms.