Peter Thiel, Tech Billionaires to Form Bank for Crypto, AI Startups

PayPal co-founder Peter Thiel and several other technology billionaires are banding together to spin up a financial institution that would fill the shoes of the ill-fated, crypto-linked Silicon Valley Bank, the Financial Times reported, citing sources familiar with the matter. 

Defense technology firm Anduril co-founder Palmer Luckey is leading the initiative to establish the commercial bank, called Erebor, with support from Palantir co-founder Joe Lonsdale and Thiel’s Founder Fund, according to the report published on Monday. 

Erebor has filed for a national bank charter with the Office of the Comptroller of the Currency, a federal banking regulator, the FT reported. 

Much like SVB, Erebor aims to service venture capital-backed startups that have been turned away by traditional financial institutions, according to the publication. Those include technology companies focused on artificial intelligence, defense, manufacturing, and cryptocurrencies, according to the FT, which cited an Erebor filing. 

SVB was a large commercial bank that served a wide range of cryptocurrency firms, including BlockFi, Circle and Avalanche, as well as other venture-backed startups. It imploded in March 2023 due to its outsized investment in low-yield bonds and other financial missteps that rendered it unable to hold up in a bank run initiated by its tech-heavy clientele. Its collapse marked the second-largest failure in the U.S. banking system. 

Erebor will have two co-CEOs: Owen Rapaport, co-founder of software firm Argus, and Jacob Hirshman, a former Circle adviser, the FT reported. 

The report shows that Erebor plans to add stablecoins to its balance sheet, although it remains unclear which dollar-pegged tokens it would hold, according to the publication. 

The parties reportedly involved in Erebor did not immediately respond to Decrypt's requests for comment. A mountain in J.R.R. Tokien's fictional world bears the same name.

Erebor’s formation comes as digital assets are poised to boom under U.S. President Donald Trump, who has maintained close ties to the industry. 

Under Trump, Senate lawmakers have passed the Genius Act, a regulatory framework for stablecoins that is a major boon for the digital assets industry. And a market structure bill that would make it easier for crypto companies to operate stateside is expected to become law later this year. 

Meanwhile, the price of Bitcoin—often used as a gauge of the cryptocurrency market’s strength—sailed to two all-time highs a few months after President Trump’s inauguration. 

Promising activity in the crypto market and within the halls of Congress has fueled an uptick in mergers-and-acquisition activity across the industry as well as a crypto IPO boom.

Edited by James Rubin