The decentralized custody startup Entropy, backed by a16z, announced its shutdown and will return funds to investors
The decentralized custody startup Entropy, led by a16z, announced its shutdown and the return of remaining funds to investors.Tux Pacific, founder and CEO of Entropy, stated on the X platform that the decision was made after four years of product development, multiple business adjustments, and two rounds of layoffs. Entropy was positioned as an alternative to centralized crypto custody institutions, 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.According to the crypto data platform RootData, the company completed a $25 million seed round financing led by a16z in 2022, with participation from Dragonfly, Variant, Coinbase Ventures, and others, raising a total of approximately $27 million. Pacific mentioned that after recent research, it was found that 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 tightening survival environment for crypto startups since 2025.