EthSystems Launches Privacy Tools for Institutional Ethereum

EthSystems, a startup building confidentiality tools for banks and asset managers transacting on Ethereum, launched Tuesday, backed by Ethereum treasury companies Bitmine Immersion Technologies and SharpLink Gaming.

The company's founding team spent the past year building and running the Ethereum Foundation's Institutional Privacy Task Force, or IPTF, holding conversations with central banks, regulators, tier-one banks and asset managers while publishing a year of open-source work: private bonds, confidential stablecoin transfers, private cross-chain settlement, a privacy-preserving identity system, and a reference document called the Ethereum Privacy Map.

EthSystems is the third entity to spin out of the Ethereum Foundation as the nonprofit narrows its own mandate, and the second in three weeks to launch with backing from Bitmine and SharpLink, the two largest corporate holders of ETH. The pattern shows the treasury companies moving beyond accumulating the asset to funding the network's infrastructure and the people building it.

Confidentiality As The Missing Layer

EthSystems, an independent, for-profit company backed by what it calls long-term Ethereum-aligned investors, argues that institutions have adopted Ethereum as an asset class but not yet as settlement infrastructure. Its pitch is that no bank will run billion-dollar flows in full public view, so each party to a transaction must see only what it has a right to see on the public ledger.

The IPTF sat inside the Foundation's institutional layer, paired with its Privacy and Scaling Explorations research team. EthSystems said it carries that work forward as an independent company, with protocol specifications and security properties for each system published on its site.

EthSystems lists three co-founders on its website. Oskar Thoren, who wrote that Tuesday was his first day off the Ethereum Foundation payroll; Mo Jalil, who posted that he previously worked at Goldman Sachs before joining the Ethereum Foundation, and Aaryamann Challani, who previously held engineering roles at the Ethereum Foundation, Fuel Labs and Status, according to his LinkedIn.

Bitmine, SharpLink Back the Launch

Bitmine, the largest corporate holder of ETH with 5.77 million tokens, or roughly 4.8% of the supply, worth about $11.3 billion in total crypto and cash holdings as of July 12, said it is a lead investor in the launch, alongside SharpLink and Ethereum co-founder Joseph Lubin. SharpLink, the second-largest corporate ETH holder with about 887,000 tokens, joined the round. Lubin, who founded Consensys, also chairs SharpLink.

Bitmine Chairman Tom Lee framed the investment as a bet on institutional demand.

"The institutionalization of Ethereum requires infrastructure that meets institutional standards for privacy and security," Lee said. "The next $100 trillion of assets won't migrate on-chain without it."

SharpLink Chief Executive Joseph Chalom said the company's thesis is that "Ethereum's differentiated value compounds as more financial activity moves onto it," and that realizing that value depends on institutions being able to transact privately.

The two companies made a nearly identical bet three weeks earlier. On June 22, Bitmine, SharpLink and Lubin anchored the launch of Ethlabs, a nonprofit research lab founded by five former Ethereum Foundation researchers to work on core protocol development. On July 1st, the same entities backed Ethereum Institutional, a more business-development-focused arm.

Both firms hold billions of dollars of ETH and have a direct financial interest in the network becoming institutional infrastructure.

The Third Spinout From a Shrinking Foundation

EthSystems launches into a gap the Ethereum Foundation is deliberately creating. The Foundation cut about 20% of its staff in a June restructuring and, under a mandate published in March, reorganized around a narrower set of priorities centered on the base protocol, censorship resistance, privacy and security. Vitalik Buterin said the Foundation is cutting its annual budget by roughly 40% and expects outside organizations to absorb work it no longer prioritizes.

Three of those organizations have now formed from Foundation alumni, each taking a different layer. Ethlabs works on core protocol and infrastructure. Ethereum Institutional handles institutional engagement, education and ecosystem coordination. EthSystems takes the applied technical layer, turning institutional requirements into production privacy systems. EthSystems described the three as complementary spinouts in its launch materials.

EthSystems lists three co-founders, all former Foundation staff who led the IPTF: Mo Jalil, previously the Foundation's institutional privacy lead and a former Goldman Sachs employee; Oskar Thoren; and Aaryamann Challani, who has held engineering roles at the Foundation and at Status, one of the earliest Ethereum mobile clients.

Even More Ethereum Entities

EthSystems is not the only team selling institutional privacy on Ethereum. Etherealize, co-founded by former Foundation researcher Danny Ryan and backed by $40 million from Paradigm and Electric Capital, is building zero-knowledge privacy and settlement infrastructure for the same institutional customers. Established privacy protocols and enterprise vendors are also competing for the same deployments.

The funding structure also carries a built-in tension. Bitmine and SharpLink hold billions of dollars of ETH, so the infrastructure they fund is infrastructure whose success would lift the value of their own treasuries. Ethlabs addressed a version of this by routing funds through an arm's-length grants administrator; EthSystems, a for-profit company, has not detailed a comparable arrangement.

ETH changed hands around $1,880 on Tuesday, according to data from CoinGecko, leaving it among the weakest-performing major crypto assets of 2026 and well below its 2025 highs — the backdrop against which treasury companies are funding work meant to widen institutional demand for the asset.