OCC Says Conditional Approval of Erebor Bank Shows Openness to Digital Asset Activities

The Office of the Comptroller of the Currency has conditionally approved the de novo national bank charter application for Erebor Bank, a new national bank that plans to focus on technology companies and ultra-high-net-worth individuals that use virtual currencies.

The OCC announced this conditional approval in a Wednesday (Oct. 15) press release, saying it thoroughly reviewed Erebor Bank’s application and applied the same review and standards used for all charter applications.

Comptroller of the Currency Jonathan V. Gould said in the release that the conditional approval demonstrates his commitment to “a dynamic and diverse federal banking system” and serves as proof that the OCC under his leadership “does not impose blanket barriers to banks that want to engage in digital asset activities.”

“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,” Gould said in the release. “The OCC will continue to provide a path for innovative approaches to financial services to ensure a strong, diverse financial system that remains relevant over time.”

It was reported in July that a group of tech billionaires was forming Erebor to fill the space left by the demise of Silicon Valley Bank, which before its 2023 collapse catered to startups and the cryptocurrency sector.

That report said the backers of Erebor include Palmer Luckey, co-founder of military contractor Anduril; Joe Lonsdale, founder of venture capital firm 8VC and co-founder of defense company Palantir; and Founders Fund, Peter Thiel’s venture capital fund.

The OCC’s conditional approval letter for Erebor Bank describes the proposed bank as a full-service national bank.

“The Bank will be a full service insured national bank that plans to target its products and services to technology companies and ultra-high-net-worth individuals that utilize virtual currencies,” the OCC said in its letter. “The bank plans to offer a variety of lending and deposit products and other related services. The Bank plans to hold non-asset backed virtual currencies on balance sheet to pay transaction fees (commonly referred to as ‘gas fees’) pursuant to 12 USC 24(Seventh).”

The letter added that final approval and authorization for the Erebor Bank to open are subject to the bank meeting pre-opening requirements.