A crypto-friendly bank founded by tech entrepreneur Palmer Luckey is in talks to raise $1.5 billion at a $9.5 billion valuation, according to a report from the Financial Times. The funding round would more than double the bank's previous valuation and underscore the growing demand for financial institutions serving the digital asset industry.
The bank, named Erebor, was launched after the 2023 collapse of Silicon Valley Bank and Signature Bank left crypto companies and other tech-focused businesses scrambling for banking partners. Its founders set out to build a financial institution that could serve clients in crypto, artificial intelligence, and defense — sectors that have often struggled to access traditional banking services.
Explosive Deposit Growth
Total deposits grew from $1.1 billion in March to $4.6 billion by July, driven by clients in crypto, AI, and defense, according to the report. That near-quadrupling of deposits in just four months reflects both the bank's aggressive expansion and the unmet demand for banking services among tech and digital asset companies.
The deposit surge suggests that Erebor has successfully positioned itself as a go-to banking partner for companies that have been turned away by larger, more traditional institutions. The crypto industry in particular has faced persistent banking access challenges, with regulators and risk-averse banks making it difficult for digital asset companies to maintain accounts.
From $4.35 Billion to $9.5 Billion
The reported $9.5 billion target valuation would represent a dramatic increase from the bank's previous funding round. Erebor raised capital at a $4.35 billion valuation earlier in 2026, meaning the new round would more than double the bank's worth in less than a year.
That kind of valuation jump reflects investor confidence in the bank's growth trajectory and the broader trend of institutional capital flowing into crypto-adjacent infrastructure. As more traditional financial institutions enter the digital asset space — from Robinhood launching no-fee crypto trading in the UK to major banks exploring tokenization — the demand for specialized banking services is only expected to grow.
Why a Crypto-Friendly Bank Matters
The need for dedicated banking infrastructure for the crypto industry has been one of the sector's most persistent challenges. Since the failures of Silvergate, Signature Bank, and Silicon Valley Bank in 2023, crypto companies have faced a shrinking pool of banking partners willing to take on their business.
Erebor was founded specifically to fill that gap, and its rapid growth suggests the demand is real. By serving clients across crypto, AI, and defense, the bank has diversified its deposit base while focusing on sectors that share a common challenge: difficulty accessing traditional financial services due to regulatory scrutiny or perceived risk.
The Bigger Picture
If the funding round closes at the reported terms, it would signal that institutional investors see significant long-term value in crypto-adjacent banking infrastructure. The fact that deposits have grown so rapidly also suggests that the crypto industry's banking problems have not been solved by larger institutions entering the space.
The raise would also come at a time of broader institutional interest in digital assets. Bitcoin ETFs have attracted billions in inflows, major financial institutions are exploring tokenization, and regulatory frameworks are gradually taking shape. A well-capitalized crypto-friendly bank could serve as critical infrastructure for the next phase of the industry's growth.
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