Bitmine, SharpLink Back EthSystems, an Ethereum Infrastructure Startup for Institutions

Bitmine, SharpLink and Consensys Chief Executive Officer Joe Lubin are backing EthSystems, a new company building Ethereum infrastructure for institutional investors.

The Block reported on July 14 that EthSystems is a for-profit spinoff from the Ethereum Foundation focused on confidential financial systems for institutions.

The co-founders are former Ethereum Foundation members Mo Jalil, Oskar Thorén and Aaryamann Challani. All previously worked on the foundation's Institutional Privacy Task Force, or IPTF.

EthSystems plans to develop technology that will allow regulated financial institutions such as banks and asset managers to conduct transactions on the Ethereum network without revealing trade data, positions or client information.

The company said its business model is to offer tailored consulting to address the biggest barriers to institutional adoption. It added that a for-profit entity was necessary to pursue commercial partnerships with institutional clients.

EthSystems also said it will build institutional financial infrastructure using zero-knowledge, or ZK, privacy technology while continuing open-source contributions and publishing protocol specifications.

The launch comes as the Ethereum Foundation undergoes a broader restructuring. The foundation cut about 20% of its workforce last month and reorganized into five clusters. Its co-executive directors and protocol research and development leaders had left earlier as well.

Bitmine, SharpLink and Lubin have also backed other independent organizations, including Ethereum Institutional and EthLabs.

Lubin previously said he expects at least three organizations to spin out of the Ethereum Foundation. The foundation will focus on core values such as censorship resistance, open source, privacy and security, while independent groups take on institutional adoption and ecosystem expansion.