Palmer Luckey, co-founder of military contractor Anduril Industries Inc. — Bloomberg
OHIO: A new US bank that aims to serve emerging tech firms in sectors such as crypto and artificial intelligence has received conditional approval to operate from the Office of the Comptroller of the Currency (OCC).
Called Erebor, the Columbus, Ohio-based firm was founded this year by a group that includes Palmer Luckey, co-founder of military contractor Anduril Industries Inc.
Also involved is Joe Lonsdale, head of venture capital firm 8VC and a co-founder of data analytics firm Palantir Technologies Inc, the Financial Times reported earlier.
Luckey and Lonsdale were major contributors to Donald Trump’s most recent presidential campaign.
The new venture will join a growing list of banks seeking to serve as financial linchpins for a boom in nascent industries including crypto, which struggled in the past to find banking partners that would provide them with financial services.
“Today’s decision is also proof that the OCC under my leadership does not impose blanket barriers to banks that want to engage in digital asset activities,” Comptroller of the Currency Jonathan Gould said in a statement.
“Permissible digital asset activities, like any other legally permissible banking activity, have a place in the federal banking system if conducted in a safe and sound manner.” Owen Rapaport, a co-founder of Erebor, declined to comment on behalf of the firm when reached by Bloomberg.
Erebor is one of several firms involved with digital assets or payments that have sought a bank or trust licence from federal and state regulators in the United States recently.
Others include Stripe Inc’s stablecoin platform Bridge, crypto exchange Coinbase Global Inc and UK-based payments processing firm Checkout.com.
However, the OCC’s decision about Erebor received sharp criticism almost immediately from Democratic Senator Elizabeth Warren, who said it risks setting up “another bailout funded by American taxpayers” that could “destabilise our banking system”.
President Donald Trump’s family has been involved in various crypto ventures including a decentralised finance platform, World Liberty Financial Inc, and crypto-mining firm American Bitcoin.
His sons, Donald Trump Jr and Eric Trump, have said their own experiences of being debanked have been part of the reason why they are getting involved in crypto, which goes beyond the traditional banking system.
A number of crypto-friendly banks have seen multi-billion-dollar windfalls amid the historic bull run in digital assets since Trump won the election and encouraged regulations and legislations that are supportive of the industry.
Cantor Fitzgerald, led by the US commerce secretary Howard Lutnick, has seen soaring revenue in part driven by a surge in crypto-related transactions. —- Bloomberg
