“We named the bank Erebor as an expression of our core mission: to steal all the wealth in the world by killing or impoverishing everyone else and sleeping on it inside a giant cave.”
Just kidding, but maybe they need a brand consultant?
A day or two ago a new application for a national bank charter was filed by the founders of something called Erebor Bank. Here’s a brief description of the business plan:
“The Bank will be a national bank and will operate as a banking organization providing traditional banking products, as well as virtual currency-related products and services, for businesses and individuals. The target market for the Bank comprises businesses that are part of the United States innovation economy, in particular technology companies focused on virtual currencies, artificial intelligence, defense, and manufacturing, as well as payment service providers, investment funds and trading firms (including registered investment advisers, broker dealers, proprietary trading firms, and futures commission merchants). The Bank will also serve select individual consumers in the high and ultra- high net worth category who work for, or invest, in such companies, and provide certain deposit and payment services to qualifying foreign banking organizations.”
Given the open-door policy that Trump Administration regulators have announced for both new bank charters and any type of crypto related finance, seeing an application like this come down the chute is no surprise.
It’s a good thing that new digital banks are being created as long as the related risks are managed effectively by regulators. But it is worth digging a little deeper on this one because there is a Silicon Valley story here.
The organizers of Erebor Bank listed in the application include one experienced heavyweight banker and several fresh-faced younger men with backgrounds as lawyers, compliance experts and family office employees. So far, so good. But who is the money behind this de novo bank?
The name “Erebor” is the giveaway.
Although you won’t see it anywhere in the application, tech heavyweights Palmer Luckey of Anduril Technologies and Oculus fame and Joe Lonsdale, formerly of Palantir Technologies, are the money men behind Erebor Bank. Just two normal guys working for companies named after seeing stones and swords in the Lord of the Rings and naming their new bank after something in The Hobbit…. Nothing to see here…move along, move along.
JRR Tolkien is all the rage in the Silicon Valley techno-determinist world and its diaspora. As Michiko Kakutani pointed out in the New York Times a few months ago, adolescent Tolkien worship in the technology world has evolved into a bizarre mix of Aleksandr Dugin-style “traditionalism”, autocratic and militaristic yearning, transhumanism and fantasies about saving the world from “darkness.” This view of Tolkien and society can be found in the writings of people like Peter Thiel, Curtis Yarvin, J.D. Vance, and Marc Andreesen.
While there is little doubt that Tolkien’s views about the world are sometimes retrograde, having been shaped by his upbringing in Imperial Britain, he would almost certainly be shocked to discover that he has become the avatar of a movement that wants omnipotent tech lords to rule the earth and impose the technological singularity on the lower orders of society.
As Kakutani wrote:
“Tolkien himself regarded “machine worshipers” with suspicion, even aversion. His experiences as a soldier who survived the gruesome World War I Battle of the Somme left him with a lasting horror of mechanized warfare; on returning home, he was dismayed as well by the factories and roadways that were transforming England’s landscape. This is why Mordor is depicted as a hellish, industrial wasteland, ravaged by war and environmental destruction, in contrast to the green, edenic Shire that the hobbits call home.”
“Of the atomic bombs dropped on Hiroshima and Nagasaki in 1945, Tolkien wrote that nuclear physics — or, for that matter, any technological innovation — need not be used for war. “They need not be used at all. If there is any contemporary reference in my story at all it is to what seems to me the most widespread assumption of our time: that if a thing can be done, it must be done. This seems to me wholly false.”
That doesn’t exactly sound like a ringing endorsement of the Palantir AI future or Anduril-style robot warfare.
Back to billionaires Palmer Luckey and Joe Lonsdale. Luckey is famously a huge Trump and MAGA financial supporter as is Lonsdale. Both are massive funders of right-wing think tanks and political causes of all stripes.
Although the business plan for Erebor Bank is straightforward for a digital bank applicant—think Brex plus First Republic for tech and defense companies and their owners, with a little Anchorage Digital Trust thrown in for flavoring—the organizers would normally have to endure a long process to get their OCC bank charter and FDIC insurance approvals.
But these founders have friends in high places. In Trump’s “pay to play” Washington, loyalty to MAGA and a demonstrated willingness to provide money when needed are the only keys needed for government approvals by formerly “independent” agencies that are now just fingers on the hand of the Unitary Executive. So, it doesn’t take much imagination to see this one sailing through to approval very, very quickly. I’d be willing to lay odds that they’ll be approved and open by year end.
As a long-time Tolkien aficionado myself, I have just one suggestion for Messrs. Luckey and Lonsdale—maybe give the bank’s name a second look?
Erebor was the name of the mountain inhabited by Smaug, a giant, evil dragon who lived only for the gold and jewels he stole from dwarves, elves and men by burning to death everyone in his path.
Smaug slept in a giant cave filled with gold and precious gems that covered his body. He turned the countryside for hundreds of miles around into a wasteland, eliminating anything that could threaten him.
Forgive me for suggesting that this might not be idea brand positioning.
Imagine the "About Us" in the bank website: “We named the bank Erebor as an expression of our core mission: to steal all the wealth in the world by killing or impoverishing everyone else and sleeping on it inside a giant cave.”
On second thought, maybe that mission statement really is on brand for the tech overlords who are likely to be the bank's core customers.