Billionaires Launch Erebor Bank to Fill SVB Void for Crypto Startups

Billionaires Peter Thiel, Palmer Luckey, and Joe Lonsdale have filed for a bank charter for Erebor, a new financial institution aimed at serving startups, cryptocurrency companies, and other so-called risky businesses. The tech group hopes to fill the gap left by the collapse of Silicon Valley Bank (SVB) — a potentially lucrative, if volatile, market. SVB’s dramatic collapse in 2023 triggered contagion across the US banking sector and led to tighter lending standards. While its assets were later acquired by First Citizens Bank, no institution has stepped in to fill SVB’s unique role — until now. For context: Before its collapse, SVB banked nearly half of all venture-backed technology and life sciences companies in the United States.

Thiel is no stranger to digital assets. He’s an outspoken Bitcoin (BTC) advocate and has also invested in Bullish, a crypto exchange that has reportedly filed for an initial public offering in the United States. The SVB collapse was the first domino in a US banking crisis that triggered several failures in 2023, including Silvergate Bank, Signature Bank and First Republic Bank. The new financial institution, named after a Lord of the Rings reference, aims to serve crypto companies and startups that have struggled to secure financing since SVB’s downfall.

This move by Thiel and his associates comes as a response to the void left by SVB’s collapse, which has left many crypto companies and startups in a lurch. The new institution, Erebor, is expected to provide the necessary financial services and support that these companies need to thrive. The filing for a bank charter is a significant step towards establishing a new financial institution that can fill the gap left by SVB’s collapse. The new institution is expected to provide a range of financial services, including lending, deposits, and other banking services, to crypto companies and startups.

The launch of Erebor is a testament to the resilience of the crypto industry and its ability to adapt to changing circumstances. Despite the challenges posed by the collapse of SVB, the industry continues to innovate and find new ways to support its growth. The new institution is expected to play a crucial role in this regard, providing the necessary financial support to crypto companies and startups that are looking to expand and grow. The launch of Erebor is also a sign of the growing interest in the crypto industry from traditional financial institutions and investors. The new institution is expected to attract a range of investors, including venture capitalists, hedge funds, and other institutional investors, who are looking to capitalize on the growth potential of the crypto industry.