Erebor Bank has tightened its fee-free stablecoin-to-dollar conversion service after professional trading firms including Wintermute and Galaxy Digital used the offer to capture small price discrepancies. The bank had allowed customers to redeem USDC and USDT for dollars at face value without fees, creating an opportunity to buy tokens below $1 and redeem them for a full dollar. Tether normally charges the greater of $1,000 or 0.1% for direct USDT redemptions. Erebor eventually told firms including Wintermute to stop using the arrangement, removed free conversions for customers without sizable deposits, and introduced volume-based fees and limits. The bank continues to serve crypto, technology, payments, investment and defense companies, offering stablecoin deposits, 24/7 blockchain settlement, digital-asset-backed lending, and direct stablecoin minting and burning. Erebor opened on February 8, 2026, after receiving a national charter from the Office of the Comptroller of the Currency. Backed by Palmer Luckey and Peter Thiel’s Founders Fund, it reportedly had roughly $4 billion in deposits and a valuation above $8 billion by mid-2026, while The Information separately reported that it was preparing a $1.5 billion fundraising at an $8 billion pre-money valuation.