BitMine chairman Tom Lee speaking onstage at Consensus Hong Kong 2026.

Ethereum’s Privacy Team Is Now a Business. Follow the Money

By Isaac • July 15, 2026 10:39 am • Comments

A team that spent the past year solving Ethereum’s privacy problem for major institutions has left the Ethereum Foundation and opened a for-profit company.

The change sounds administrative until the business model comes into view. EthSystems intends to sell the technical work that banks, asset managers and payment companies need before they can move sensitive activity onto a public blockchain.

Its backers make the wager even clearer. Ethereum-focused public companies and one of the network’s most prominent founders are financing a commercial privacy layer for institutional use.

Trending: The CLARITY Act’s Hardest Fight Is Over Who Gets to Profit

EthSystems introduced the company Tuesday as an independent continuation of the Ethereum Foundation’s Institutional Privacy Task Force. The founding team is Mo Jalil, Oskar Thoren and Aaryamann Challani.

The three say they spent a year inside the foundation speaking with hundreds of institutions while shipping technical work aimed at institutional privacy. Their earlier backgrounds span protocol research, secure messaging, peer-to-peer infrastructure, enterprise technology and traditional finance.

They are leaving the foundation on good terms and expect to keep collaborating with people there. The split creates a dedicated commercial counterparty while the foundation concentrates more heavily on cypherpunk fundamentals and individual users.

EthSystems defines its lane as confidential systems for institutional Ethereum. The company will focus on privacy, protocol design and production work where an institution needs contractual accountability, technical support and a vendor it can pay.

Public Ethereum gives every participant a shared ledger, but that visibility creates a serious commercial problem. A bank cannot expose client identities, trading intentions, internal positions or settlement details to every observer while a transaction waits for confirmation.

Private ledgers hide that information by restricting who may enter and who controls the system. EthSystems is pursuing a different model: use Ethereum’s shared settlement layer while controlling which transaction details are revealed, to whom and under what conditions.

That requires more than a privacy switch. Institutions need selective disclosure, identity controls, security guarantees, performance standards and a design that can survive legal review, audits and production operations.

The team’s existing work covers several pieces of that puzzle. It has published proofs of concept for private bonds using zero-knowledge proofs, privacy-focused layer-two systems and fully homomorphic encryption.

It has also built private stablecoin transfer designs with KYC-gated entry and selective disclosure, private cross-chain atomic swaps, a validium prototype and hardened shielded pools. Other research addresses identity, disbursement and coordination when issuers fail or jurisdictions turn hostile.

The company plans to turn that research into paid workshops, architecture reviews, protocol specifications, proofs of concept and production integrations. Its open-source libraries, public specifications and ecosystem maps are expected to continue alongside the commercial work.

This hybrid approach could give EthSystems a valuable feedback loop. Institutional projects expose practical procurement, compliance and risk constraints, while open development lets Ethereum teams inspect and improve the underlying designs.

The hard part will be keeping both sides credible. Clients will expect confidentiality and delivery discipline, while the Ethereum community will watch how much of the important work remains open and interoperable.

GlobeNewswire identified BitMine as the lead investor, with additional backing from SharpLink, Ethereum co-founder Joe Lubin, SNZ and other Ethereum-aligned investors. The release did not disclose the funding amount, valuation or ownership terms.

BitMine and SharpLink have built public-market strategies around large ETH treasuries. Both benefit if Ethereum develops beyond a traded asset into infrastructure that banks and asset managers use for stablecoins, tokenized securities and settlement.

Lubin brings a different kind of alignment through his role in Ethereum’s creation and the ecosystem built around Consensys. Together, the backers connect EthSystems to capital, Ethereum infrastructure and companies with a direct interest in greater institutional demand for the network.

The release says the team has worked with central banks, regulators, tier-one banks and asset managers. It does not name those institutions or announce a signed customer, leaving commercial conversion as the first major test for the new company.

The investment also reveals where the backers think Ethereum’s bottleneck has moved. Transaction capacity and lower fees remain important, yet banks can have plenty of blockspace and still refuse to expose commercially sensitive data.

Privacy in this setting does not mean hiding every fact from regulators. A useful system may keep details away from competitors and the public while preserving proofs, permissions and disclosure paths for authorized parties.

That is a difficult engineering balance. Too much transparency can make the product unusable for business, while opaque systems can lose the auditability and shared verification that made a public chain attractive in the first place.

CoinDesk placed the launch inside a wider reorganization of Ethereum’s institutional work. EthSystems follows other specialized spinouts, including EthLabs and Ethereum Institutional.

EthLabs is focused on protocol research and scaling, while Ethereum Institutional is designed to coordinate adoption and engagement with large financial firms. EthSystems is taking the narrower technical lane where confidentiality systems must be designed, reviewed and shipped.

The separation gives each group a clearer mandate and funding model. It also spreads work once associated with the Ethereum Foundation across independent organizations that will have to coordinate without a single internal chain of command.

CoinDesk also highlighted the same unresolved market gap: financial firms are increasingly comfortable with stablecoins and tokenized assets, yet many remain reluctant to put real business flows on a ledger where transaction details are visible by default.

EthSystems enters the market with working prototypes and respected backers, though prototypes are several steps away from bank-grade production. Security audits, integrations, regulatory acceptance and live transaction volume will decide whether the research becomes durable infrastructure.

Named customers would be the clearest early signal. A production bond, stablecoin transfer or cross-chain settlement using the team’s confidentiality designs would show that an institution moved beyond workshops and experimentation.

The open-source record will matter as well. Public specifications can expose design flaws early, reduce dependence on one vendor and help privacy tools work across wallets, issuers, custodians and networks.

EthSystems is making a direct commercial claim: institutional Ethereum needs a company devoted to confidentiality, and those institutions are ready to pay for serious technical execution.

Its investors have placed capital behind that claim. The next evidence has to come from customers willing to move sensitive financial activity onto public rails.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

 

Search ProCoinNews