A new trend has emerged! American tech giants have joined forces to establish the "Lonely Mountain" bank, targeting the Crypto Assets and AI markets.

After the collapse of Silicon Valley Bank (SVB), there has been a new gap in the demand for financial services in the tech industry. A group of prominent tech investors, including military tech entrepreneur Palmer Luckey (known for founding Anduril Industries) and venture capitalist Joe Lonsdale (co-founder of Palantir and managing partner at 8VC), are preparing to establish a new bank called "Lonely Mountain." This bank, named after the "Lonely Mountain" in The Lord of the Rings, has officially applied for a national bank charter in the United States, aiming to serve the niche market left in the wake of the SVB collapse and ambitiously venturing into cutting-edge fields such as crypto assets, defense technology, and artificial intelligence.

1. Fill the market gap after the collapse of SVB

Silicon Valley Bank was a major bank for startups and their venture capital supporters in the United States. Its collapse in 2023 shook the financial infrastructure of the tech industry, triggering panic among startups. Although the remnants of Silicon Valley Bank were absorbed by First Citizens and some employees shifted to HSBC, entrepreneurs and investors are still complaining about the tightening of credit pipelines and the decreasing number of banking partners willing to back emerging technologies.

According to a source familiar with the matter, the co-founders of Lonely Mountain first discussed establishing a bank after the collapse of Silicon Valley Bank (SVB) in 2023. The founders of Lonely Mountain include supporters of Donald Trump's 2024 presidential campaign, who stated that the institution would fill the void left by the collapse of Silicon Valley Bank. Lonely Mountain aims to serve the "innovation economy"—supporting startups and individuals in industries that traditional financial institutions typically consider too risky, such as blockchain, artificial intelligence, defense, and advanced manufacturing.

II. The Ambition of Lonely Mountain: Entering the Crypto Assets and Cutting-Edge Technology

The application describes Lonely Mountain as "a national bank... providing traditional banking products as well as virtual currency-related products and services for businesses and individuals," focusing on underserved customers of traditional and fintech institutions. It will also provide services for non-U.S. companies seeking to enter the U.S. banking system.

A significant innovation from the bank, which is also a potential regulatory hotspot, is its plan to become a leader in the stablecoin trading space. Stablecoin trading is a highly controversial area in the world of Crypto Assets, where digital tokens are pegged to traditional currencies like the US dollar. The documents from Lonely Mountain describe its goal as "the most strictly regulated entity in conducting and facilitating stablecoin trading." This demonstrates its ambitions in the Crypto Assets field and its attempt to operate under strict regulation.

3. Founding Team and Operating Model

The founders of Lonely Mountain include Palmer Luckey and Joe Lonsdale, both heavyweight figures in the tech industry, but they are expected not to participate in the daily operations of Lonely Mountain. The bank will be led by co-CEOs Jacob Hirshman (former advisor at the crypto assets company Circle) and Owen Rapaport (former CEO of the digital asset compliance company Aer). Senior banking executive and former executive vice president of Valley National Bank Mike Hagedorn will serve as the president.

Despite Lonely Mountain's commitment to cutting-edge technology, its headquarters is still located in Columbus, Ohio, with a second office in New York City. In order to uphold its desired startup culture of service, Lonely Mountain will be a pure digital bank, offering customer support and financial products solely through a smartphone app and website.

Many details regarding Lonely Mountain remain confidential. Parts of the application, including the equity structure, business plan, and shareholder identities, have been submitted in secrecy.

IV. Future Outlook and Challenges

The establishment of Lonely Mountain highlights the ongoing restructuring of financial services in the tech industry, as traditional banks become more cautious while venture-backed companies seek to establish their own institutions. Whether Lonely Mountain can succeed where Silicon Valley Bank has failed, and whether its model that integrates Crypto Assets, defense, and Silicon Valley politics can win favor with regulators, remains to be seen. Currently, its founders believe that there are still plenty of opportunities waiting for them to explore.

The emergence of this new bank not only reflects the deep demand from the tech industry for Financial Service but also demonstrates confidence in emerging fields such as Crypto Assets. However, finding a balance between innovation and regulation will be a significant challenge for Lonely Mountain.

Conclusion:

The new bank "Lonely Mountain," co-founded by tech giants Palmer Luckey and Joe Lonsdale, aims to fill the market gap left by the collapse of Silicon Valley Bank, actively positioning itself in cutting-edge fields such as stablecoins, artificial intelligence, defense, and advanced manufacturing. This ambitious plan has the potential to reshape the landscape of financial services for tech startups and will test its ability to innovate under strict regulation. Whether Lonely Mountain can succeed will be an important indicator to observe the future integration and development of technology and finance.