The privacy team from the Ethereum Foundation (EF) has officially spun off into an independent commercial project — EthSystems. This is not just a rebranding, but a strategic move aimed at mass adoption of blockchain solutions among major financial players.
The new startup has received support from Ethereum co-founder Joseph Lubin, as well as from mining company BitMine and technology firm SharpLink. It was founded by former EF employees — Mo Jalil, Oscar Thoren, and Aryamann Challani, who previously led the institutional privacy group within the foundation.
Zero-Knowledge as the Foundation for Financial Privacy
EthSystems plans to build its products on zero-knowledge proofs (ZK-proofs). These tools will allow banks and asset managers to conduct large transactions on the Ethereum network without revealing details of trading positions or confidential client data. Essentially, this addresses the main barrier preventing traditional finance from transitioning to DeFi.
The company's business model is based on paid consulting and the development of custom solutions. The team emphasizes that large businesses cannot work with a non-profit foundation — they need a commercial counterparty with legal liability. At the same time, all protocol specifications will remain open, preserving the spirit of decentralization.
"Privacy is not an option, but a key requirement. Without data protection, large financial organizations simply will not enter the blockchain," said EthSystems CEO Mo Jalil.
Interestingly, before the public announcement, the team had already been working on open-source code for a year. Developers presented protocols for private transfers, bond issuance, and identity systems. This indicates that the product base is already ready for implementation.
EF Restructuring: A New Phase for the Ecosystem
The launch of EthSystems comes amid a large-scale restructuring of the Ethereum Foundation. Last month, the foundation cut 20% of its staff and reallocated resources across five key areas. Alongside EthSystems, other independent entities have emerged in the ecosystem — EthLabs and Ethereum Institutional. This is a trend: EF is gradually delegating commercial functions to external teams, retaining fundamental research for itself.
Incidentally, in June, a proposal appeared on the Ethereum Research forum to redirect up to 10% of validator staking rewards to fund the ecosystem. This could become a new source of funding for such projects.
My comment: The transition of the privacy team into a commercial structure is a logical and timely step. Institutions will not enter Ethereum without privacy guarantees, and EthSystems could become the bridge connecting traditional finance with blockchain. However, the key challenge is to maintain a balance between the transparency required by regulators and the privacy needed by businesses.