Trump-Era Bank Approval Signals Shift as Crypto Card Service Collapses
The Office of the Comptroller of the Currency approved its first de novo bank charter under the Trump administration's second term, clearing Erebor to open for business on February 8th with a focus on AI, defense, and crypto clients—just as a controversial "no KYC" crypto card service abruptly shuttered operations.
The timing highlights the divergent paths emerging in financial technology as regulators navigate between traditional banking oversight and the crypto sector's persistent compliance challenges. For finance chiefs at tech companies and startups, the developments signal both new banking options and renewed scrutiny of payment card programs that skirt know-your-customer rules.
Erebor, which submitted its charter application in June 2025, positions itself as a partial successor to Silicon Valley Bank, which failed in 2023. The bank's name references J.R.R. Tolkien's fictional mountain fortress, and its business model targets high-net-worth individuals, startups, and companies in AI, manufacturing, defense, and cryptocurrency. The institution also plans to serve 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, according to reporting by Fintech Business Weekly. The approval marks a notable shift in the OCC's approach to new bank charters, which had slowed considerably following the regional banking crisis.
The same week Erebor opened, UnCash—a crypto card service that operated without traditional identity verification—announced it was shutting down immediately. The service blamed Mastercard for what it called a "clean, corporate guillotine," saying its 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 said in a statement. "And frankly, we're done pretending we can fight Goliath with a slingshot made of good intentions."
The shutdown came one day after Fintech Business Weekly published an investigation into compliance gaps in certain crypto card programs. UnCash said it would refund users, who can withdraw funds to external crypto wallets.
The parallel stories underscore the tension finance leaders face when evaluating banking and payment partners. While new charter approvals may expand options for treasury management and corporate banking, the UnCash collapse demonstrates how quickly card network enforcement can cascade through the fintech stack.
For CFOs whose companies rely on banking-as-a-service providers or embedded finance partnerships, the question isn't just which institutions can serve their needs—it's which ones will still be operating next quarter. The Erebor approval suggests regulators are willing to charter banks serving higher-risk sectors, but only through traditional supervised channels. Services attempting to route around those requirements, as UnCash did, face existential risk when card networks decide to enforce compliance standards.
The broader implication: the "move fast and break things" era of fintech may be giving way to a more bifurcated model, where properly chartered institutions gain regulatory blessing to serve emerging industries while unregulated alternatives face increasingly aggressive enforcement. Finance leaders will need to assess not just their banking partners' capabilities, but their regulatory foundations.
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