Erebor Bank, the crypto- and defense-focused financial institution founded by Palmer Luckey and backed by Peter Thiel, is in negotiations for a new funding round that would value it at at least $8 billion, according to people familiar with the matter. This would represent nearly a doubling of its $4.35 billion valuation from a $350 million funding round last December.
The bank’s explosive deposit growth is a key driver. Since March, deposits have nearly quadrupled from $1.1 billion to $4.05 billion, and the client base expanded by about 400 new customers in the last three months. Luckey emphasized that none of the deposit growth came from his own companies, highlighting organic independent demand. Erebor projects profitability by year-end.
A critical asset is its national banking charter. After receiving preliminary approval in October 2025, Erebor became the first new national charter granted under the Trump administration in February 2026. This charter gives the bank direct control over deposits and payments, reducing reliance on third-party banking partners – a major advantage for crypto firms that have struggled with banking access.
Erebor plans to offer dollar-denominated stablecoin deposits and payments, positioning itself at the intersection of traditional banking and blockchain settlement. However, demand for crypto-backed lending has been lower than expected, shifting the immediate opportunity toward deposits, payments, and custody-adjacent services. The bank has also signed a non-binding letter of intent with Banco de Venezuela for correspondent banking, potentially easing foreign exchange flows into that sanctioned country but adding complex sanctions and compliance risks.
Political scrutiny has emerged. Senator Elizabeth Warren expressed “serious concerns” about the speed of the charter approval, questioning whether political ties accelerated the process. This places Erebor at the center of a broader debate over favorable treatment for crypto-linked financial firms under the current administration.
