a16z-Backed Crypto Custody Startup to Shut Down, Return Investor Funds
Entropy, a decentralized crypto custody startup backed by Andreessen Horowitz (a16z), is winding down and plans to return remaining capital to traders, in accordance to founder and chief government Tux Pacific.
Pacific wrote on X over the weekend, “I’m winding-up Entropy.” They added, “After 4 years, a number of pivots, and two rounds of layoffs, I’ve determined to wind-up Entropy and return capital to our traders.”
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The shutdown follows a late-stage push in 2025 to reposition the corporate round a crypto automations platform, which Pacific described as “principally n8n/zapier/and many others for crypto,” with automated signing by way of threshold cryptography, safe computation utilizing trusted execution environments, and “deep AI integrations.”
That product course nonetheless failed to clear a venture-style progress bar. “After an preliminary suggestions request revealed that the enterprise mannequin wasn’t enterprise scale, I used to be left with the selection to discover a artistic approach ahead or pivot as soon as extra,” Pacific wrote.
Entropy first drew consideration in 2022 when it raised $25M in a seed spherical led by a16z crypto, with participation together with Dragonfly Capital, Coinbase Ventures, Robot Ventures, Ethereal Ventures, Variant and Inflection. The firm had earlier raised a $1.95M pre-seed spherical.
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At launch, Entropy pitched itself as a decentralized different to custody suppliers comparable to Fireblocks and Coinbase, leaning on cryptographic approaches like multi-party computation to let customers management how funds may transfer, together with rule-based constraints.
Pacific additionally thanked a16z crypto and Guy Wuollet for serving to steer the wind-down, calling their steerage “invaluable.”
The closure lands in a more durable funding local weather for early-stage crypto startups. Crypto enterprise deal rely fell about 60% year-on-year in 2025, dropping to roughly 1,200 transactions from greater than 2,900 in 2024.
Next, Pacific mentioned they plan to step again earlier than deciding what comes after Entropy. “My time in crypto is perhaps coming to an finish, as I really feel myself drawn particularly into prescription drugs,” they wrote, including they need to work on hormone supply and validate analysis on new estradiol drug formulations.
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