Palmer Luckey is Back: What He's Building and Who's Paying For It

So, Palmer Luckey's "bank" got its first rubber stamp from the feds. Color me shocked. No, really, I'm just floored. The same government that takes a decade to approve a new bridge just confirmed that Palmer Luckey's Peter Thiel-backed crypto bank clears a key regulatory hurdle, and they did it with a straight face.

Let’s be real. This wasn't a regulatory hurdle; it was a scheduled photo-op. A fundraising memo for this outfit, Erebor Bank, was floating around earlier this year, and it basically spelled out the entire game plan. It didn't talk about sound financial practices or serving the community. No, it boasted that "Palmer's political network will get this done."

Read that again. Not "our innovative business model," not "our robust risk management," but our political network.

This is the part of the movie where the villain monologues his entire evil plan because he’s just so sure he can’t be stopped. And honestly, why would he think otherwise? Luckey dumped over a million dollars into political coffers in 2024, mostly to the GOP. Is it so crazy to think he expected a return on his investment? This isn't banking; it's a backroom deal with a bank charter attached.

The Fix Is In, and It Ain't Subtle

You want to know how deep the rot goes? Let's look at the players. The guy in charge of this approval, the Comptroller of the Currency, is Jonathan Gould. He’s a former Trump administration official who, get this, briefly worked as the chief legal officer for a Bitcoin mining company. Putting him in charge of regulating a crypto bank is like asking a fox to design a security system for a henhouse.

Gould put out a statement saying, "our decision today is a first but important step in living up to that commitment" to a "dynamic and diverse federal banking system." Let me translate that from D.C.-speak for you: "We're open for business, and our friends get to cut the line."

But it gets so much better. The memo for Erebor also bragged about a cofounder's "unique connectivity to banking regulators," including Gould himself. And for the grand finale: a lawyer from the firm Skadden, Adam Cohen, who literally worked on Erebor's application to the OCC, left his firm in August and joined the OCC as Gould's chief counsel.

This is a bad idea. No, 'bad' doesn't cover it—this is a five-alarm dumpster fire of cronyism. They aren't even trying to hide it anymore. It's one thing to have a revolving door between industry and government; it's another thing entirely to hold the door open while the guy is still filling out the paperwork. What are we even doing here? Are we supposed to just nod along and pretend this is normal?

The whole system feels like a VIP club where the rules are just suggestions for the little people. My bank once put a three-day hold on a check from my own grandmother, but these guys can get preliminary approval for a multi-billion dollar operation by basically saying "we know a guy." It's infuriating. This ain’t the American dream; it’s the American grift.

A Bank for Assets You Can't Touch

So what is this glorious, politically-connected bank even going to do? According to their pitch, Erebor plans to make money by lending against assets that other banks are too scared or too smart to touch. We're talking crypto and, hilariously, GPUs—the graphics cards that power AI models.

It's a bank built on pure, uncut Silicon Valley hype. They're creating a financial institution based on the premise that digital tokens and computer chips are the new gold. Maybe they are, but what happens when the crypto market has one of its regularly scheduled meltdowns? What happens when a new generation of GPUs makes the old ones worthless overnight? The traditional banking system might be slow and boring, but it's generally not built on assets with the stability of a Jenga tower in an earthquake.

The investor memo bragged they could get final approval in "less than six months," a timeline that’s laughably fast compared to the typical nine-plus months for an FDIC application. Offcourse, when you've got friends on the inside, maybe the paperwork just moves a little faster. You can almost picture the scene: some underpaid federal employee sees the Erebor application land on their desk with a little sticky note on it from the boss, and suddenly it's at the top of the pile.

This whole venture is a monument to the new Gilded Age. It's a bunch of ultra-wealthy guys, backed by other ultra-wealthy guys like Peter Thiel, creating their own private financial system and getting the U.S. government to bless it. Then again, maybe I'm the crazy one. Maybe this is just how the world works now, and I'm the sucker still expecting a level playing field...

The Game Was Rigged from the Start