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WIRED
15-07-2025
- Business
- WIRED
Tech Billionaires Back Erebor in the Wake of Silicon Valley Bank Collapse
Jul 15, 2025 1:29 PM Funded by Anduril cofounder Palmer Luckey and Palantir cofounder Joe Lonsdale, the new bank—named, like their companies, after Tolkien lore—aims to serve startups in crypto, AI, and defense. Joe Londsale and Palmer Luckey. Photo-Illustration:Palmer Luckey, cofounder of the weapons manufacturer Anduril, along with firms connected to Palantir cofounders Joe Lonsdale and Peter Thiel, are investing in a new bank that is aiming to fill a gap left by Silicon Valley Bank's collapse two years ago. The venture is expected to be backed by upwards of $250 million in funding from Luckey, Lonsdale's venture firm 8VC, Thiel's Founders Fund, crypto-focused VC Haun Ventures, and several angel investors whose identities are not yet publicly known. Like Anduril and Palantir, Erebor Bank is named after a term coined by J.R.R. Tolkien (introduced in The Hobbit , it's the name of a mountain where the murderous dragon Smaug hoards gold and jewels). The bank's organizers and backers have remained tight-lipped about their vision. But their national bank charter application filed in June with the Office of the Comptroller of the Currency (OCC), as well as interviews with more than a dozen industry sources, suggest the organizers are leveraging current regulatory openness in banking, as well as their political power, to build a crypto-focused Silicon Valley Bank (SVB) successor made in their image. The leadership team named in Erebor's application includes Michael Hagedorn, an experienced bank executive who will serve as Erebor's President; Trevor Capozza, head of operations at Palmer Luckey's family office; and co-CEOs Owen Rapaport, cofounder of crypto compliance platform Aer Compliance, and Jacob Hirshman, who has served in regulatory and advisory roles at the stablecoin provider Circle. Erin Gleason, Chief Communications Officer of Founders Fund, told WIRED that Thiel was 'not involved' in the deal, and that Founders Fund invested $1 million into Erebor. Luckey and Lonsdale are not named in the nonconfidential sections of Erebor's filings; the application notes that major shareholders will not be involved in day-to-day operations. Luckey, 8VC, Erebor's organizers, and their attorney, Adam Cohen, did not respond to requests for comment. Erebor's intended client base is similar to that of Silicon Valley Bank, which served as the go-to business-banking partner for the Bay Area tech industry and its affiliates. (SVB famously collapsed in March 2023 after economic volatility and risky liquidity practices led to a run on the bank. First Citizens Bank purchased SVB after the collapse; it now operates as a subsidiary.) The proposed bank states in its OCC filing that its customers would include startups in industries like crypto, AI, and defense, as well as wealthy and ultrawealthy consumers working in these fields. It also plans to assist foreign banks with some dollar-based activities. Erebor claims its target business clients are currently 'not well served by either traditional or disruptive financial institutions, in particular with respect to insufficient access to credit,' and says it will maintain a conservative balance sheet to account for the risks of 'having a loan portfolio focused on frontier industries.' Erebor also has crypto aspirations, including becoming 'the most regulated entity conducting and facilitating stablecoin transactions,' and facilitating 'broader acceptance of stablecoins.' (Stablecoins are cryptocurrencies whose value is tied to a currency or traditionally less-volatile commodity; they are often backed by cash or instruments like treasury bills with the aim of maintaining a consistent value.) The bank additionally says it would accept cryptocurrencies as collateral for some loans. Erebor is part of a growing wave of corporations applying for bank charters following Donald Trump's return to the White House. Regulators appointed by Trump have expressed an interest in reviewing new entrants with an 'open mind.' 'The OCC is being very friendly to new applicants,' says Michele Alt, a regulatory consultant who previously worked in the OCC's Law Department. Alt says she believes that under Trump, the OCC is trying to accelerate the review process for new banks, and applicants may see approvals within four to six months of filing, down from the current year-plus waiting period. (An OCC spokesperson said it "does not comment on pending licensing applications or specific financial institutions" in response to a request for comment by WIRED.) The Trump administration has also reversed several Biden-era rules that limited banks from using stablecoins for payments and holding dollar reserves for stablecoin providers, opening the floodgates for financial institutions to launch stablecoin-based payment systems and serve stablecoin companies as clients. In March, for example, Rodney Hood, then-acting head of the OCC, overturned a Biden-era directive that had compelled banks to prove that they had 'controls in place to conduct [stablecoin] activity in a safe and sound manner' before using stablecoin products and services. The Trump family, meanwhile, launched its own Trump-branded stablecoin earlier this year. Stablecoin advocates say the technology can be used to make real-time, cross-border payments more affordable. Some point to their use for remittances, or laud stablecoins' ability to expand the power of the US dollar. Detractors argue that stablecoins effectively remove US dollars from circulation, weakening the power of the Fed to set and control monetary policy. Migrating to a digital system that has experienced crashes and is weakly regulated also raises fears of contagion, which could elevate risk and erode trust in financial systems. Crypto companies Circle, Ripple, BitGo, and a subsidiary of Protego are all applying for banking charters; Coinbase is 'actively considering' a charter application; and payments firm Wise has also filed with the OCC. If approved by the OCC and other regulators, Erebor can accept deposits, make loans, and be eligible for Federal Reserve payment systems as well as FDIC insurance. (Circle, Protego, and Wise are applying for charters primarily for facilitating payments through federal systems.) Some new charter applications reflect 'the adoption of 'pay to play' in a whole lot of areas that traditionally did not work that way,' says Todd Baker, a financial services executive and senior fellow at Columbia Business School and Columbia Law School. Luckey and Lonsdale have been outspoken supporters and funders of Donald Trump as well as successful government contractors. That the cofounders of a weapons manufacturer and surveillance behemoth have set their sights on banking may raise some eyebrows. There are some statutes, such as the Bank Holding Company Act and Change of Bank Control Act, that aim to prevent commercial ventures and their owners from engaging in banking activities or exerting control over banks (with a few exceptions). At the same time, as an early adopter of blockchain-based cross-border payments technologies for defense and law-enforcement purposes, such as for paying assets overseas, the US government may find Erebor useful as a clearing house for blockchain-based government activities, according to Kevin Lehtiniitty, an executive in stablecoin-based payments infrastructure who's counted US government agencies as clients. "What I imagine is going on here is that should this become a new chartered bank… the bank would be providing this 'cash in, obfuscated crypto out' type of a product that would allow these agencies to be able to make payments,' he says. Anduril also knows how to sell to the US government, and Erebor can use some parts of Anduril's growth strategy, says Rory McDonald, a business school professor at the University of Virginia who has studied Anduril. In Anduril's case, Palmer Luckey and his cofounders started by targeting the US government's border-security technologies, identifying them as a 'fringe' part of the defense market. They offered an 'imperfect but good enough technological solution and then [rode] the wave of improvement in that technology,' McDonald tells WIRED. High-risk startups in crypto, AI, and defense may be that fringe market for Erebor—especially crypto companies. Signature Bank and Silvergate Bank—both of which failed around the same time as SVB—had also aimed to corner the crypto business-banking market by offering crypto-focused services. Stephen Marcus, Co-Founder and General Partner of Riot Ventures, which invests in some of the industries Erebor intends to serve, says Erebor will soon have to speak publicly about its products and determine how it will 'communicate the stability' to potential business clients. 'At the end of the day, these companies need access to liquidity, and they can't afford to have their cash not accessible,' he says, noting the 'notoriety of the investors and those that are booting it up might be helpful,' though they'll have to 'earn' companies' trust outside the portfolio companies whose banking decisions they can influence more easily. Granted, that assumes Erebor gets that far; for all the deregulation making charter approvals speedier and more likely, regulators may see Erebor's application as too unprecedented or systemically risky. According to Evey Guo, Principal at lobbying firm and consulting group FS Vector (founded by the former Chief Compliance Officer and General Counsel of Circle), Erebor's 'novel elements' may elicit 'additional regulatory scrutiny and require particularly robust controls.' Another banking industry specialist said Erebor's 'monocrop' client profile could also cause concern, as a lack of client diversity partially contributed to the bank collapses of 2023. Additionally, Baker, the Senior Fellow at Columbia, contends Erebor's conservative approach to lending relative to its balance sheet may impose hurdles, as regulators have rejected previous banking proposals that shied away from lending. Michele Alt, the regulatory consultant, sees a potential clash between the crypto industry and incumbent banks, which are 'two very powerful lobbies,' in the wake of these charter applications. Organizations like the American Bankers Association (ABA) and Independent Community Bankers of America (ICBA) may attempt to take legal action or otherwise object to some charter applications, as the ICBA has most recently in a letter to the OCC, "strongly" opposing the attempt by Protego's subsidiary to enter the space. The outcome for Erebor, as well as the slew of stablecoin banking ventures popping up, depends on incumbents' litigiousness, and on the ability for banking regulators to function as arbiters upholding some integrity within a multi-trillion-dollar banking system. 'We know that [regulators] have deprioritized certain areas consistent with the policies of the current administration, but I would say, if not the federal banking agencies—who will regulate these banks?' Alt says.
Politico
10-07-2025
- Business
- Politico
Palantir founder's plans for the FDA
FOLLOW THE MONEY Joe Lonsdale, co-founder of the large government contractor Palantir, wants to embed a team of 15 to 20 'elite engineers' inside the Food and Drug Administration who would 'accelerate the FDA's latest AI initiatives,' according to a post he wrote on Substack. The FDA recently announced that it has deployed an AI chatbot that will help staff speed up medical device and drug reviews. Lonsdale is working with two organizations, the Abundance Institute, a year-old Utah-based nonprofit that hopes to accelerate the adoption of artificial intelligence, and Stand Together, a philanthropic organization founded by billionaire Charles Koch, to raise $4 million and train fellows who would be deployed at federal agencies. 'I'm sponsoring one of these AI-native engineers to help push this forward,' Lonsdale said on social media platform But, but, but … How can billionaires just drop a team of engineers and product managers into a government agency? Through the Intergovernmental Personnel Act, a 1970 law that allows the government to forgo typical hiring practices to bring on experts from academia and nonprofits; those fellows 'can sit desk‑to‑desk with reviewers,' according to Lonsdale. There's just one problem: 'This is not true,' said Andrew Nixon, spokesperson for the Department of Health and Human Services. The agency has no plans to take on fellows from Abundance Institute and Stand Together, he said. Christopher Koopman, CEO of the Abundance Institute, told Future Pulse his organization has had discussions about bringing on its fellows with the FDA. And he said that in speaking with former FDA officials, he's under the impression that slow review times are a technical problem. 'They're problems of capability, not authority. That's what sparked the idea: What if we could forward-deploy high-impact, AI-native engineers into the agency, not as outside critics but as inside contributors, to help build modern systems and workflows that empower the FDA to do what it's already allowed to do, only better and faster?' he said. Even so: The FDA has been hiring AI talent and rolled out an AI chatbot agencywide that Commissioner Marty Makary says will speed up review times. But agency staff have previously told POLITICO that the FDA's chatbot likely doesn't have the ability to do that. The challenges at the agency, they said, are more complicated than simply hiring more tech talent. WELCOME TO FUTURE PULSE This is where we explore the ideas and innovators shaping health care. Swedish security service members who shared details of their running and cycling routes on fitness app Strava revealed details of the prime minister's location, including his private address. Whoops! Share any thoughts, news, tips and feedback with Danny Nguyen at dnguyen@ Carmen Paun at cpaun@ Ruth Reader at rreader@ or Erin Schumaker at eschumaker@ Want to share a tip securely? Message us on Signal: Dannyn516.70, CarmenP.82, RuthReader.02 or ErinSchumaker.01. EXAM ROOM The National Institutes of Health will cap the amount that publishers of scientific journals can charge government-backed researchers to make their work publicly available starting in fiscal 2026, the agency said Tuesday. 'I am gravely concerned about the overall financial burden placed on the public — who may fund the original research, then pay again to access the resulting data, publications, or commercial products,' NIH Director Jay Bhattacharya said in a statement. 'In effect, taxpayers may bear multiple costs for innovations their contributions helped enable.' By the numbers: According to the NIH, some major publishers charge upward of $13,000 per article for immediate open access. The charges are in addition to subscription fees that the government pays. High publishing costs are a double hit to taxpayers who already fund underlying NIH research, the statement said. The NIH said one publisher receives $2 million in subscription fees from the agency and tens of millions in processing charges. The move is the latest in a series of changes related to the distribution of NIH research under Bhattacharya, who's criticized the scientific publishing ecosystem for a lack of transparency and for favoring risk-averse studies. In April, the agency moved up the timeline for making peer-reviewed NIH-funded research publicly available immediately without an embargo. The policy went into effect on July 1. Big picture: Bhattacharya's boss, Health Secretary Robert F. Kennedy Jr., is not a fan of major scientific journals. During a conversation on the 'Ultimate Human' podcast in May, Kennedy accused The New England Journal of Medicine, JAMA and The Lancet of being 'corrupt' and publishing studies funded and approved by pharmaceutical companies. 'Unless those journals change dramatically, we are going to stop NIH scientists from publishing in them, and we're going to create our own journals in-house,' Kennedy said. At the time, a JAMA spokesperson said the journal had nothing to add when asked about Kennedy's remarks, while NEJM and The Lancet did not respond to requests for comment. HHS also did not respond to requests for comment. Earlier this year, Bhattacharya and FDA Commissioner Marty Makary helped launch a publication, the Journal of the Academy of Public Health, to help promote open conversation among scientists. Both officials are on leave from the journal's editorial board.
CNA
02-07-2025
- Business
- CNA
Palmer Luckey, backed by Palantir's Lonsdale, to launch crypto-focused bank
Tech billionaire Joe Lonsdale said on Wednesday he is investing in a new crypto-focused U.S. bank being launched by Anduril co-founder Palmer Luckey that aims to fill the void left by Silicon Valley Bank's collapse. Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed. Lonsdale, who co-founded Palantir, said in an emailed statement to Reuters that he is a "proud investor" in the project. The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application. Like Anduril and Palantir, Erebor takes its name from J.R.R. Tolkien's "The Lord of the Rings" series. In the books, Erebor is the "Lonely Mountain", a fortress whose treasures are reclaimed from the dragon Smaug. The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York. According to the charter application, the bank will be led by Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle. Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves. Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services. The bank in a regulatory filing said it aims to be "the most regulated entity conducting and facilitating stablecoin transactions." The Financial Times first reported the news and said that the group of tech billionaires backing Erebor also includes Peter Thiel's Founders Fund. Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said.
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First Post
02-07-2025
- Business
- First Post
Tech's new ‘Lonely Mountain': Billionaires join hands to guard start-up treasures in Silicon Valley
A group of tech entrepreneurs is preparing to launch a US bank aimed at serving start-ups and cryptocurrency businesses, seeking to fill the void left by the collapse of Silicon Valley Bank (SVB) read more A group of tech entrepreneurs led by Palmer Luckey, co-founder of military contractor Anduril, is preparing to launch a US bank aimed at serving start-ups and cryptocurrency businesses, filling a void left by the collapse of Silicon Valley Bank (SVB). The new institution, to be named Erebor, has applied for a national bank charter, according to a regulatory filing made public this week. Erebor is backed by a roster of prominent technology investors, including Joe Lonsdale, founder of venture capital firm 8VC and a co-founder of defence company Palantir. Founders Fund, the venture capital group launched by Peter Thiel, is also among the investors, Financial Times cited two people familiar with the matter as saying. STORY CONTINUES BELOW THIS AD The bank is named after the 'lonely mountain" from J.R.R. Tolkien's The Lord of the Rings, the same literary source that inspired the names of Anduril and Palantir. According to the application, 'the bank will be a national bank . . . providing traditional banking products, as well as virtual currency-related products and services, for businesses and individuals.' Erebor intends to target companies in what it describes as the 'innovation economy,' with a focus on virtual currencies, artificial intelligence, defence, and manufacturing. The filing said the bank would also serve individuals who work for or invest in these companies, and would work with non-US firms 'seeking access to the US banking system.' The bank's founders began discussing the idea in 2023 after the collapse of SVB, which had been the preferred lender for many US start-ups. SVB's assets were eventually acquired by First Citizens Bank, and a number of its bankers joined HSBC in the US However, many start-ups have since reported difficulty accessing capital and services, prompting efforts to create a new financial institution tailored to their needs. Erebor plans to set itself apart by focusing on customers that are 'not well served by traditional or disruptive financial institutions, in particular with respect to insufficient access to credit,' the filing said. The bank will be headquartered in Columbus, Ohio, with an additional office in New York. It plans to operate entirely digitally, marketing its products and services through a smartphone app and website. STORY CONTINUES BELOW THIS AD The venture is expected to play a significant role in handling stablecoin transactions, a type of cryptocurrency pegged to real-world assets like the US dollar. The application notes Erebor aims to be 'the most regulated entity conducting and facilitating stablecoin transactions.' Luckey and Lonsdale, both major donors to Donald Trump during the 2024 presidential election, are not expected to be involved in Erebor's daily operations, according to people familiar with the project. The bank will be led by co-CEOs Jacob Hirshman, a former adviser at crypto firm Circle, and Owen Rapaport, CEO of digital assets compliance company Aer Compliance. Mike Hagedorn, a former senior executive at Valley National Bank, will serve as president. Some details of the application, including its equity structure, business plan, and shareholder information, were submitted confidentially and have not been made public. Lonsdale confirmed he was financially backing the project but declined further comment. Luckey did not respond to a request for comment. STORY CONTINUES BELOW THIS AD
CNBC
20-06-2025
- Business
- CNBC
Palantir co-founder Joe Lonsdale on Israel-Iran conflict, AI tech wars and future of DOGE
Joe Lonsdale, Palantir co-founder and 8VC founding partner, joins 'Squawk Box' to discuss the latest in the Israel-Iran conflict, what the role of America should be, impact of the 'bunker buster' bomb, AI tech wars, state of OpenAI-Microsoft relationship, future of DOGE, and more.
