Peter Thiel backs crypto-friendly Silicon Valley Bank rival — Report

Sam Bourgi 3 minutes ago Peter Thiel backs crypto-friendly Silicon Valley Bank rival — Report Before its collapse, Silicon Valley Bank had deep ties to crypto companies and venture capital funds investing in the industry. Listen 0:00 21 News COINTELEGRAPH IN YOUR SOCIAL FEED A group of billionaires, including Peter Thiel, is reportedly planning to launch a new financial services firm to fill the gap left by the collapse of Silicon Valley Bank in March 2023. The new bank, to be called Erebor, will focus on serving startups and cryptocurrency companies, according to the Financial Times , which cited anonymous sources familiar with the plans. The project has applied for a US bank charter, which allows financial institutions to operate as a bank. Thiel’s venture fund, Founders Fund, is among the bank’s early investors. In addition to Thiel, the group reportedly includes Palmer Luckey, co-founder of defense contractor Anduril, and Joe Lonsdale, founder of 8VC. Thiel, who co-founded PayPal in the late 1990s, is well-known in the crypto space for his advocacy of Bitcoin ( BTC ) and digital assets. As Cointelegraph reported , Thiel backs crypto exchange Bullish, which recently submitted regulatory filings for an initial public offering in the United States. Source: 0xMert_ In addition to serving crypto companies, Erebor reportedly aims to become a major lender for early-stage startups and other “riskier” firms that may struggle to access capital amid tighter banking regulations. Related: KBC Bank to offer Bitcoin, Ether to retail customers The collapse of Silicon Valley Bank still reverberates across the crypto sector California’s financial watchdog shut down Silicon Valley Bank in March 2023 after rising interest rates eroded the value of its long-term bond investments, triggering a bank run and liquidity crisis when too many clients tried to withdraw funds at once. As Cointelegraph reported at the time , Silicon Valley Bank was the first FDIC-insured bank to fail that year. Its collapse left a massive gap in the market, as the bank had served about half of all venture capital–backed tech and life sciences companies in the United States. The failure set off a domino effect, contributing to a broader banking crisis that also took down Silvergate Bank , Signature Bank and First Republic Bank. There were several high-profile bank failures in the United States in 2023. Source: FDIC The fallout dealt a heavy blow to the digital asset market, with crypto investment funds losing 10% of their assets under management in just one week. As Harvard Business Review noted, the collapse of Silicon Valley Bank specifically put significant pressure on lending within the venture capital ecosystem. Despite its collapse, Silicon Valley Bank still operates today as a division of First Citizens Bank, which acquired the company in late March 2023. Its focus continues to be on private equity, technology and the life sciences industry. Magazine: Pakistan will deploy Bitcoin reserve in DeFi for yield, says Bilal Bin Saqib # Business # Banks # Financial Times # Peter Thiel # Report # United States # SVB Add reaction