Ex-Ethereum Team Launches EthSystems for Institutional Privacy

Former members of the Ethereum Foundation’s Institutional Privacy Task Force announced on Tuesday the launch of EthSystems, a for-profit company backed by Consensys CEO Joe Lubin and treasury firms Bitmine and SharpLink. Co-founders Mo Jalil, Oskar Thorén and Aaryamann Challani said the firm will build systems that let banks and asset managers carry out large-scale financial activity on public Ethereum while protecting sensitive data.

EthSystems was spun out of the non-profit Ethereum Foundation and is staffed by former task force members. The company plans to offer commercial consulting to address privacy, compliance and scalability needs for regulated institutions and expects many projects to involve commercial counterparties.

The firm intends to develop tools that conceal trade details, positions and client identities on Ethereum. EthSystems indicated it will likely use zero-knowledge cryptography and related privacy techniques alongside other technical methods to limit which data is visible on the public network.

The founders said they will continue to publish protocol specifications and contribute open-source code while charging for commercial services. Work completed while part of the Foundation includes prototypes for private bonds using zero-knowledge proofs, confidential stablecoin transfers, private cross-chain settlements and an “Ethereum Privacy Map.” The group reported hundreds of conversations with central banks, regulators and financial institutions during those projects.

In its announcement EthSystems wrote, “Our mission: help institutions build confidential systems on public Ethereum without giving up what makes Ethereum worth using.”

The launch follows a period of organizational change at the Ethereum Foundation, which reduced staff by about 20% and reorganized into five operational clusters after several senior executives and protocol research leads departed. Around the same time, Lubin and other backers have funded independent entities including EthLabs and Ethereum Institutional to pursue protocol research, advocacy and industry outreach outside the Foundation.

EthSystems described its approach as combining paid consulting with continued open-source publishing to provide regulated entities with confidentiality on public Ethereum while contributing to open standards and public research.