Ethereum Foundation Privacy Team Spins Out Into For-Profit Startup EthSystems

Former members of the Ethereum Foundation’s Institutional Privacy Task Force have launched EthSystems, a new for-profit company building privacy infrastructure for banks and other financial institutions on Ethereum.

From Foundation Research to Commercial Product

The startup grows out of work the Ethereum Foundation carried out over the past year, engaging with central banks, regulators, global banks and asset managers on enterprise-focused privacy technology. EthSystems plans to commercialize that work, including confidential stablecoin transfers, private bond issuance, cross-chain settlement systems and open-source protocol specifications. The company said on social media that commercial engagements need a commercial counterparty, explaining its choice to operate as a for-profit business built on continuing the same work while now charging for it.

Part of a Wider Foundation Restructuring

The spinout arrives during a major organizational shift at the Ethereum Foundation, following months of criticism over leadership and strategy. Other recent spinouts include EthLabs, a nonprofit focused on protocol research and scaling, and Ethereum Institutional, a nonprofit built to coordinate engagement with large financial firms.

Addressing Banks’ Privacy Concerns

EthSystems argues that confidentiality remains one of the biggest obstacles keeping banks and asset managers off public blockchains, despite growing interest in tokenized assets and stablecoins. The company says its modular approach will let participants selectively disclose transaction details while keeping Ethereum’s security guarantees intact. Backers include BitMine, SharpLink, Ethereum co-founder Joseph Lubin and SNZ.