Erebor Bank
1. Overview
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Bank: Erebor Bank, named after Tolkien’s Lonely Mountain
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Founders & Backers: Tech investors including Peter Thiel, Palmer Luckey, and Joe Lonsdale, supported by Founders Fund
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Purpose: A new U.S. national bank to serve underbanked sectors like crypto, AI, and defense startups, inspired by the collapse of Silicon Valley Bank
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Headquarters: Columbus, Ohio
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Charter Status: In application phase with the U.S. Office of the Comptroller of the Currency (OCC)
2. Use Case
Erebor aims to:
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Offer full-service banking (accounts, payments, credit) to startups in emerging tech fields
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Provide regulated infrastructure for stablecoins and digital assets
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Serve international companies looking for access to U.S. banking rails
3. Governance & Compliance
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Co-CEOs: Jacob Hirshman (former Circle advisor) and Owen Rapaport (CEO of compliance firm Aer)
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President: Mike Hagedorn (former EVP at Valley National Bank)
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Operates with a strong compliance focus and aims to be “the most regulated bank for stablecoin transactions”
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Plans to facilitate regulated crypto flows for both U.S. and international clients
4. Regulation & Transparency
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Currently applying for a federal banking charter through the OCC
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Intends to offer crypto-related services within a fully regulated banking framework
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Will be subject to federal prudential regulation once approved
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Transparent about founders, structure, and operational vision (FT article)
5. Economic Model
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Business model based on traditional banking revenue (lending, custody, payments)
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Positioned as a digital-native bank tailored to high-risk tech verticals
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Will likely support stablecoin flows, DeFi treasuries, and startup liquidity pipelines
6. Final CyberFinance Compliance Rating
| Category | Rating | Notes |
|---|---|---|
| Authorization | 🟠 ORANGE | Charter pending; OCC license not yet approved |
| Transparency | 🟢 GREEN | Leadership and structure publicly disclosed |
| Client Feedback | 🟠 ORANGE | No user reviews yet; bank is pre-operational |
| Financial Soundness | 🟠 ORANGE | Strong backing, but no operational performance yet |
🟠 Final Rating: ORANGE SIGNAL
📌 Ratex42 Summary
Erebor Bank represents a high-profile attempt to reintroduce regulated banking for the crypto and frontier-tech ecosystem. With credible founders and a clear regulatory strategy, Erebor could become a cornerstone of compliant digital finance—but until the charter is granted and operations begin, it remains a high-potential project in progress.
