The team behind the Ethereum Foundation’s Institutional Privacy Task Force has spun out as a new for-profit company called EthSystems. The startup is backed by investors including BitMine and Joe Lubin, betting that institutions need a privacy layer before running money on a public blockchain.
EthSystems will develop privacy tools designed specifically for institutional Ethereum users who need transaction confidentiality while maintaining regulatory compliance. The founding team spent the past year running the Ethereum Foundation’s task force exploring privacy solutions for institutional adoption.
The company’s thesis is that large financial institutions require privacy features to compete on public blockchains. Without confidentiality, institutions would reveal their trading strategies and positions to competitors, making public blockchain participation impractical for many use cases.
The spin-out reflects the Ethereum Foundation’s ongoing restructuring, with various initiatives being moved to independent organizations. This allows specialized teams to operate with greater autonomy and pursue commercial opportunities while remaining aligned with Ethereum’s overall ecosystem goals.
The backing from BitMine, the Ethereum treasury company chaired by Fundstrat’s Tom Lee, and Joe Lubin, a co-founder of Ethereum and CEO of Consensys, provides EthSystems with both capital and ecosystem connections. Lubin’s involvement is particularly significant given his long-standing commitment to Ethereum development.
The launch of EthSystems comes at a time when institutional interest in Ethereum is growing, driven by the launch of spot ETFs and increasing tokenization activity. Privacy solutions could be a key enabler for the next wave of institutional adoption.
This article was adapted from Decrypt. Read the original here.
