Former members of the Ethereum Foundation privacy team have officially launched EthSystems, a for-profit company building privacy and compliance infrastructure for banks, asset managers, and financial institutions looking to operate on the Ethereum network.

According to the EthSystems launch announcement, the company will help institutions execute Ethereum-based transactions without exposing sensitive information to the public, such as customer identities, transaction amounts, trading positions, and counterparties.

EthSystems officially announced its public launch on July 14, 2026. The company has secured seed funding from BitMine Immersion Technologies, SharpLink, Ethereum co-founder Joe Lubin, and several other supporters within the Ethereum ecosystem. The amount of funding has not yet been disclosed.

EthSystems Continues Ethereum Foundation Privacy Research

EthSystems was founded by Mo Jalil, Oskar Thorén, and Aaryamann Challani. The three previously established and led the Institutional Privacy Task Force (IPTF) under the Ethereum Foundation.

The team worked with central banks, regulators, commercial banks, asset managers, and financial market infrastructure providers to study the privacy requirements of financial institutions seeking to operate on public blockchain networks.

The launch of EthSystems also comes amid the Ethereum Foundation's restructuring and the creation of Ethlabs. Several functions previously handled directly by the foundation are now being transitioned to independent organizations with more specialized responsibilities.

EthSystems will continue developing several research initiatives and prototypes originally created through the IPTF, including:

• Private stablecoin transfers that remain compliant with regulations.
• Private bond issuance using zero-knowledge proofs.
• Confidential cross-chain settlement.
• Identity systems that protect user data.
• Settlement infrastructure with selective disclosure.
• Privacy integrations for tokenized assets.

The company also provides workshops, proof-of-concept development, architecture reviews, and custom infrastructure that can be deployed directly by institutional clients.

Blockchain Transparency Remains a Challenge for Banks

Ethereum is a public blockchain where transaction data, wallet addresses, asset movements, and smart contract interactions can all be viewed through blockchain explorers.

While this transparency enables transactions to be publicly verified, it also presents challenges for banks and asset managers that cannot disclose customer information, investment strategies, trading positions, or internal transaction flows to the public.

For example, a stablecoin transfer conducted by a company on Ethereum may reveal the payment amount, recipient address, transaction time, and treasury management patterns. Such information could potentially be analyzed by competitors or other third parties.

EthSystems aims to address this issue through selective disclosure, an approach that allows transaction information to be disclosed only to authorized parties, such as the transaction participants, auditors, or regulators.

Other parties can still verify that a transaction is valid without seeing all of its underlying data. In one of its prototypes, EthSystems utilizes shielded pools and zero-knowledge proofs to process private stablecoin transfers while restricting access to participants who have completed the required verification process.

Privacy is not the only area currently being developed within the Ethereum ecosystem. The Ethereum Foundation previously introduced the Clear Signing standard to reduce the risks of blind signing by making transaction details easier for users to understand before approving them.

The combination of privacy, security, identity, and compliance is becoming increasingly important because financial institutions require strong data protection without sacrificing their ability to conduct audits.

Privacy Considered Essential for Ethereum's Institutional Adoption

The launch of EthSystems comes as more institutions begin exploring stablecoins, tokenized real-world assets (RWAs), and blockchain-based settlement systems.

The growth of tokenization is also evident in collaborations between traditional financial firms and blockchain projects, such as the launch of tokenized ETF products by Franklin Templeton and Ondo Finance.

Despite this progress, institutional adoption of public blockchains continues to face challenges related to confidentiality, customer data protection, system integration, and regulatory compliance.

Banks require more than simply gaining access to Ethereum. They also need infrastructure capable of determining which information can be viewed by the public, transaction counterparties, auditors, and regulators.

According to EthSystems, privacy is not merely an optional feature for institutions. Confidentiality is a fundamental requirement for conducting large-scale financial transactions on public blockchain networks without exposing commercially sensitive information.

The company also believes that privacy systems should not eliminate regulators' ability to conduct oversight. As a result, its approach focuses on controlled privacy rather than complete anonymity.

Part of Ethereum's Evolving Ecosystem

EthSystems is one of several new organizations established following changes to the Ethereum Foundation's organizational structure.

Ethlabs focuses on protocol research and Ethereum core infrastructure development. Ethereum Institutional is responsible for institutional engagement, education, and coordination with financial organizations. Meanwhile, EthSystems specializes in developing privacy infrastructure for financial applications.

Unlike Ethlabs and Ethereum Institutional, which operate as non-profit organizations, EthSystems has been established as a commercial company. This structure enables it to enter into contracts, build customized enterprise solutions, and take responsibility for implementing technology for institutional clients.

The launch of EthSystems has not produced any direct impact that can specifically be linked to the price of ETH. However, its presence could strengthen the infrastructure required to bring stablecoins, bonds, tokenized assets, and other institutional financial transactions onto Ethereum.

Ultimately, EthSystems' success will depend on its ability to balance transaction confidentiality with auditing and regulatory compliance requirements. If successfully deployed at scale, the company could help remove one of the primary barriers preventing banks and financial institutions from adopting public blockchain networks.