First Trump-Era Bank Approval Targets Crypto and AI Sectors as UnCash Collapses

A new federally chartered bank focused on cryptocurrency, artificial intelligence, and defense sectors officially opened for business on February 8, marking the first de novo bank approval under President Trump's second term and signaling a potential shift in regulatory posture toward fintech-friendly institutions.

Erebor, which submitted its charter application to the Office of the Comptroller of the Currency in June 2025, aims to serve high-net-worth individuals, startups, and businesses in AI, manufacturing, defense, and crypto—sectors that have struggled to find consistent banking relationships since Silicon Valley Bank's 2023 collapse. The bank will also work with payment service providers, investment funds, and trading firms.

The timing is notable for finance leaders watching regulatory tea leaves. The bank's approval comes as the administration appears to be taking a more accommodating stance toward crypto-adjacent businesses, a marked departure from the previous regulatory environment that saw multiple banks exit the sector entirely.

Erebor's name—a reference to the dwarven kingdom in Tolkien's "The Hobbit"—may be whimsical, but its backers are well-connected. The bank has ties to Palmer Luckey, founder of defense contractor Anduril, among other figures in the administration's orbit, according to Fintech Business Weekly's reporting.

The new bank's launch coincides with turbulence elsewhere in the crypto banking ecosystem. UnCash, a so-called "no KYC" crypto card service, abruptly shut down last week, just one day after being featured in a compliance investigation by the same publication. The company blamed Mastercard for what it called a "clean, corporate guillotine," saying the card network's termination of its issuing relationships constituted "a death sentence."

"Given that 90% of our cards ran on the Mastercard network, this isn't a minor inconvenience—it's a death sentence," UnCash said in a statement. "And frankly, we're done pretending we can fight Goliath with a slingshot made of good intentions." The company said it would refund users, who can withdraw funds to external crypto wallets.

The contrast between the two events illustrates the bifurcating landscape for crypto financial services. While regulators appear willing to charter traditional banks serving the sector, card networks and incumbent financial institutions continue to enforce compliance standards that can prove fatal to businesses operating in regulatory gray areas.

For CFOs at companies in Erebor's target sectors, the bank's approval raises a practical question: whether a new, specialized institution can provide the stability that SVB's clients lost nearly three years ago. The bank's focus on payment service providers and trading firms suggests it's positioning itself as infrastructure for the broader fintech ecosystem, not just a deposit-taker for crypto startups.

The key test will be whether Erebor can maintain its charter and banking relationships if regulatory winds shift again—a concern that has haunted crypto-friendly banks since Signature Bank and Silvergate Capital exited the market in 2023.