Ethereum Foundation privacy team spins out as for-profit EthSystems to serve institutions with Lubin, Bitmine backing

The team that ran the Ethereum Foundation's Institutional Privacy Task Force has spun out to launch EthSystems, an independent, for-profit company building privacy and compliance technology for banks and asset managers on Ethereum. Founders Mo Jalil, Oskar Thorén and Aaryamann Challani announced the launch on July 14, 2026, with anchor funding from Bitmine Immersion Technologies, Sharplink, Ethereum co-founder Joe Lubin and Asia-focused investment firm SNZ. Jalil serves as CEO; he previously worked at Goldman Sachs, while Thorén spent close to a decade building crypto privacy infrastructure including Waku protocols now part of Logos. The company launches with a year of open-source work already published and relationships built with central banks, regulators, tier-one banks and asset managers during its Foundation tenure.

Background

EthSystems arrives as the Ethereum Foundation undergoes significant contraction and restructuring in 2026. According to Decrypt, the 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 have spun out to take on work the Foundation is stepping back from: Ethlabs, a non-profit handling core protocol research; Ethereum Institutional, a non-profit coordinating outreach to banks and asset managers; and EthSystems, the for-profit building applied privacy technology. EthSystems says it left the Foundation on good terms and sees itself as complementary, focused on depth over breadth. The founders spent the past year running the Institutional Privacy Task Force, holding hundreds of conversations with central banks, regulators, tier-one banks and asset managers. Their thesis is that Wall Street has embraced crypto as an asset class but not yet as commercial infrastructure. Banks and asset managers are exploring stablecoins, tokenized assets and on-chain settlement, but the founders argue none will run real flows in full public view on a shared ledger. EthSystems' business model is bespoke consulting: workshops, architecture reviews, protocol specifications and production systems, while continuing to publish open-source work alongside paid engagements.

What happened

EthSystems launched Tuesday, July 14, 2026, as an independent, for-profit firm building privacy and compliance technology designed to let banks and asset managers transact on Ethereum without exposing sensitive information like trade details or client identities, according to Decrypt. The founders, Mo Jalil, Oskar Thorén and Aaryamann Challani, built and led the Ethereum 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; Thorén spent close to a decade on crypto privacy infrastructure, building peer-to-peer messaging and the Waku protocols now part of Logos. Cryptodaily reported the launch from New York, noting anchor funding from Bitmine Immersion Technologies (NYSE: BMNR), Sharplink (Nasdaq: SBET), Joe Lubin and other ecosystem supporters. The company launches with a year of open-source work already public at ethsystems.org, 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, or as the company put it, continuing the work it was already doing, only now charging for it. EthSystems said it left the Foundation on good terms and sees itself as complementary, focused on depth over breadth. It joins Ethlabs and Ethereum Institutional as the third recent spin-out from the Foundation.

Market impact

The sources provide several figures that frame EthSystems' launch. Bitmine holds some 5.7 million ETH and Sharplink around 888,000, according to Decrypt, and both have pitched public-market investors on Ethereum's role as settlement infrastructure for stablecoins and tokenized assets. Decrypt also notes that Ethereum already hosts $16 billion in tokenized real-world assets. Tom Lee, Chairman of Bitmine, said in a launch announcement that the next $100 trillion of assets won't migrate on-chain without the infrastructure EthSystems is building. Joseph Chalom, Chief Executive Officer of Sharplink, said the full Ethereum opportunity can only be realized if institutions can use the network while preserving privacy. The sources do not report any token price reaction, trading volumes or fund flows tied to the announcement. The funding amount raised by EthSystems is not disclosed in either source. The Ethereum Foundation's June staff cut of 20% and its budget trim are the only other numerical figures provided. No market data beyond these figures is present in the sources.

Why it matters

EthSystems' launch matters because it tests whether the Ethereum Foundation's institutional privacy work can sustain itself commercially as the Foundation shrinks. The founders argue that confidentiality is the hard part on a shared public ledger: each party to a transaction should see only what it has a right to see, and nothing more. If banks and asset managers will not run real flows in full public view, then privacy tooling becomes a precondition for the institutional adoption that Bitmine, Sharplink and Lubin are betting on. The backing is notable because Bitmine and Sharplink are the two largest publicly traded Ethereum treasury companies, giving them a direct stake in the thesis that Ethereum becomes settlement infrastructure for stablecoins and tokenized assets. Lubin contrasted the team with others that he said had offered institutions privacy technology amounting to permissioned systems with extra steps. The spin-out also reflects a broader reorganization: three groups have left the Foundation in weeks to take on work it is stepping back from, with Ethlabs handling core protocol research and Ethereum Institutional coordinating outreach. EthSystems says it left on good terms and sees itself as complementary, focused on depth over breadth.