EthSystems launched Tuesday as an independent, for-profit firm building privacy and compliance technology for institutional Ethereum transactions, founded by Mo Jalil, Oskar Thorén, and Aaryamann Challani, who previously led the Ethereum Foundation's Institutional Privacy Task Force. The company addresses the confidentiality gap preventing banks and asset managers from conducting stablecoin transfers, tokenized asset trades, and settlement on Ethereum's public ledger, where transaction details and client identities remain visible. EthSystems is the third organization to spin out of the Ethereum Foundation during 2026, following the Foundation's June decision to cut 20% of staff and restructure operations, and the first for-profit entity among the spin-outs.
EthSystems Launches Privacy Technology for Institutional Ethereum
EthSystems builds privacy and compliance systems designed to let banks and asset managers transact on Ethereum without exposing sensitive information like trade details or client identities. The three founders built and led the Foundation's Institutional Privacy Task Force, a year-long effort that held hundreds of conversations with central banks, regulators, tier-one banks, and asset managers. Jalil, the CEO, previously worked at Goldman Sachs, while Thorén spent close to a decade on crypto privacy infrastructure, building peer-to-peer messaging and the Waku protocols now part of Logos.
The company launches with a year of open-source work already published, including proofs of concept for private bonds, confidential stablecoin transfers, private cross-chain settlement, hardened shielded pools, and an Ethereum Privacy Map cataloging institutional requirements across the ecosystem. Its business model is bespoke consulting: workshops, architecture reviews, protocol specifications, and production systems. EthSystems said it will keep publishing open-source work alongside paid engagements.
The founders argue that institutions have embraced crypto as an asset class but not yet as commercial infrastructure. Banks and asset managers are already exploring stablecoins, tokenized assets, and on-chain settlement, but none will run real flows in full public view. On a shared, public ledger, each party to a transaction should see only what it has a right to see, and nothing more, according to the company's thesis.
Ethereum Foundation Restructures and Spins Out Three Organizations
The Ethereum Foundation cut 20% of its staff in June, trimmed its budget, wound down its in-house privacy and scaling research unit, and reorganized around a leaner mandate after at least nine senior figures departed over the year. In the space of weeks, three groups spun out to take on work the Foundation is stepping back from.
Ethlabs, a non-profit, handles core protocol research. Ethereum Institutional, also a non-profit, coordinates outreach to banks and asset managers. EthSystems, the for-profit, builds the applied privacy technology. EthSystems said it left the Foundation on good terms and sees itself as complementary, focused on depth over breadth.
Bitmine, Sharplink, and Joe Lubin Back EthSystems
EthSystems is funded by Bitmine Immersion Technologies, Sharplink, Ethereum co-founder Joe Lubin, and Asia-focused investment firm SNZ. Bitmine and Sharplink are the two largest publicly traded Ethereum treasury companies. Bitmine holds approximately 5.7 million ETH and Sharplink holds around 888,000 ETH. Both companies have pitched public-market investors on Ethereum's role as settlement infrastructure for stablecoins and tokenized assets.
Bitmine Chairman Tom Lee stated in a launch announcement that the next $100 trillion of assets won't migrate on-chain without EthSystems' privacy technology. Lubin contrasted the team with others that he said had offered institutions privacy technology that amounted to permissioned systems with extra steps.
Ethereum hosts $16 billion in tokenized real-world assets and $159 billion in stablecoins, according to RWA.xyz. Jalil argued that privacy is the difference between Ethereum holding billions today and running trillions tomorrow.
FAQ
What did EthSystems launch on Tuesday?
EthSystems launched Tuesday as an independent, for-profit firm building privacy and compliance technology for institutional Ethereum transactions. The company was founded by Mo Jalil, Oskar Thorén, and Aaryamann Challani, who previously led the Ethereum Foundation's Institutional Privacy Task Force.
Why did the Ethereum Foundation spin out three organizations in 2026?
The Ethereum Foundation cut 20% of its staff in June and restructured operations, leading three groups to spin out in the space of weeks. Ethlabs handles core protocol research, Ethereum Institutional coordinates outreach to banks and asset managers, and EthSystems builds applied privacy technology. The Foundation wound down its in-house privacy and scaling research unit and reorganized around a leaner mandate after at least nine senior figures departed over the year.
Who funds EthSystems?
EthSystems is funded by Bitmine Immersion Technologies, Sharplink, Ethereum co-founder Joe Lubin, and Asia-focused investment firm SNZ. Bitmine holds approximately 5.7 million ETH and Sharplink holds around 888,000 ETH. Both Bitmine and Sharplink are the two largest publicly traded Ethereum treasury companies.
