a16z-Backed Decentralized Custody Startup Entropy Announces Shutdown and Returns Funds to Investors
Odaily News: Entropy, a decentralized custody startup led by a16z, has announced its shutdown and will return remaining funds to investors. Entropy's founder and CEO, Tux Pacific, stated on platform X that the decision was made after four years of product development, multiple business pivots, and two rounds of layoffs.
Entropy positioned itself as an alternative to centralized crypto custodians, utilizing technologies such as multi-party computation, threshold cryptography, and trusted execution environments to provide users with cross-chain asset management and automated signing services. The company completed a $25 million seed round led by a16z in 2022, with participation from Dragonfly, Variant, Coinbase Ventures, and others, raising a total of approximately $27 million.
Pacific stated that recent research revealed the business model could not support venture capital-level growth, leading to the decision to cease operations and return capital. This event also reflects the increasingly challenging environment for crypto startups since 2025. (TheBlock)
