Entropy, a decentralized custody startup invested by a16z, announces shutdown and return of funds to investors

According to Odaily, decentralized custody startup Entropy, led by a16z, has announced its shutdown and will return remaining funds to investors. Tux Pacific, founder and CEO of Entropy, stated on the X platform that this decision was made after four years of product development, multiple business pivots, and two rounds of layoffs.

Entropy was positioned 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. In 2022, the company completed a $25 million seed round led by a16z, with participation from Dragonfly, Variant, and a certain exchange, bringing total funding to approximately $27 million.

Pacific stated that recent research revealed the business model was unlikely to 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)