Summary
- EthSystems was established on Tuesday to develop "confidential systems for institutional Ethereum," founded by the team behind the Ethereum Foundation's Institutional Privacy Task Force.
- This marks the third organization to emerge from the Foundation this summer and the first for-profit venture, supported by Ethereum treasury entities Bitmine and Sharplink, along with co-founder Joe Lubin.
- The company contends that institutions will hesitate to utilize stablecoins, tokenized assets, and settlement on a public ledger until trade specifics, positions, and client identities can be concealed.
The team that dedicated the last year to enhancing Ethereum Foundation's institutional privacy initiatives has transitioned to establish a new enterprise. EthSystems launched on Tuesday as an independent, profit-driven firm focused on creating privacy and compliance technologies that allow banks and asset managers to operate on Ethereum without revealing sensitive information such as trade specifics or client identities.
The founding members—Mo Jalil, Oskar Thorén, and Aaryamann Challani—previously led the Foundation's Institutional Privacy Task Force, which spent a year engaging in extensive discussions with central banks, regulators, tier-one banks, and asset managers. Jalil, now serving as CEO, previously held a position at Goldman Sachs; Thorén has spent nearly a decade developing crypto privacy infrastructure, including peer-to-peer messaging and the Waku protocols now integrated into Logos.
Today marks the launch of EthSystems.
We are focused on creating confidential systems for institutional Ethereum.
While institutions are interested in utilizing Ethereum, a significant challenge remains: the absence of integrated, modular privacy tools.
We were part of the Ethereum Foundation's Institutional Privacy Task Force… pic.twitter.com/Gp75lgoP0z
— EthSystems (@eth_systems) July 14, 2026
The Privacy Challenge in Ethereum
The firm posits that while Wall Street has started to accept cryptocurrency "as an asset class, it has not yet adopted it as commercial infrastructure." Financial institutions are actively investigating stablecoins, tokenized assets, and on-chain settlement; however, none are willing to engage in significant transactions in a fully public manner. According to the founders, confidentiality is a major issue on a public ledger: each transaction participant should only have visibility into what they are entitled to see.
EthSystems has launched with a year’s worth of open-source contributions already available, including prototypes for private bonds, confidential stablecoin transfers, private cross-chain settlements, secure shielded pools, and an Ethereum Privacy Map that outlines institutional needs across the ecosystem. The company's business model focuses on custom consulting services: workshops, architecture reviews, protocol specifications, and production systems, effectively continuing their previous work but now monetizing it. They plan to keep releasing open-source contributions alongside their paid services.
Another Spin-Out from the Ethereum Foundation
EthSystems represents the latest group to separate from the Ethereum Foundation, which has been undergoing significant restructuring throughout 2026. The Foundation reduced its workforce by 20% in June, cut its budget, dissolved its in-house privacy and scaling research unit, and reorganized to focus on a more streamlined mandate after losing at least nine senior members over the year.
Within just a few weeks, three teams have spun out to tackle initiatives that the Foundation is stepping back from: Ethlabs, a nonprofit focused on core protocol research; Ethereum Institutional, another nonprofit that focuses on outreach to banks and asset managers; and EthSystems, the for-profit entity dedicated to developing applied privacy technology. EthSystems has stated that it left the Foundation amicably and views its role as complementary, emphasizing "depth over breadth."
The firm is supported by many of the same investors behind the other spin-outs: Bitmine Immersion Technologies and Sharplink, both significant publicly traded Ethereum treasury firms, alongside Ethereum co-founder Joe Lubin and the Asia-focused investment firm SNZ. (Note: Lubin, through his company Consensys, and Bitmine Chairman Tom Lee are investors in Dastan, the parent company of Decrypt.)
These investors are directly interested in EthSystems’ premise. Bitmine possesses approximately 5.7 million ETH while Sharplink has around 888,000, and both have been promoting Ethereum's potential as a settlement framework for stablecoins and tokenized assets to public market investors. Lee characterized EthSystems as addressing a critical need, stating in a launch announcement that "the next $100 trillion of assets won't migrate on-chain without it." Lubin contrasted this team with others that he claimed had provided institutions with privacy solutions that merely amounted to "permissioned systems with additional steps."
Currently, Ethereum is facilitating $16 billion in tokenized real-world assets and $159 billion in stablecoins, according to RWA.xyz. Jalil asserted that privacy is crucial, stating that it is "the difference between Ethereum holding billions today and running trillions tomorrow."