Entropy, a decentralized crypto custody startup backed by Andreessen Horowitz (a16z), is shutting down and returning its remaining funds to investors, founder and CEO Tux Pacific announced.
Over the weekend, Pacific shared on X, “I am winding-up Entropy. After four years, several pivots, and two rounds of layoffs, I’ve decided to return capital to our investors.”
The closure comes after a late-stage push in 2025 to transform Entropy into a crypto automation platform—think “n8n or Zapier for crypto,” as Pacific described it. The platform aimed to offer automated signing via threshold cryptography, secure computation using trusted execution environments, and deep AI integrations.
Despite these ambitions, the new product direction didn’t meet venture-scale growth expectations. “After feedback showed the business model wasn’t venture scale, I had to decide whether to pivot again or find a creative way forward,” Pacific wrote.
Entropy first grabbed attention in 2022, raising $25 million in a seed round led by a16z Crypto, with support from Dragonfly Capital, Coinbase Ventures, Robot Ventures, Ethereal Ventures, Variant, and Inflection. Prior to that, it raised $1.95 million in a pre-seed round. The startup was originally pitched as a decentralized alternative to custodians like Fireblocks and Coinbase, using cryptography such as multi-party computation to give users more control over how their funds moved.
Pacific expressed gratitude to a16z Crypto and Guy Wuollet for helping guide the wind-down, calling their support “invaluable.”
The closure comes amid a cooling crypto funding environment—crypto venture deals dropped roughly 60% in 2025 compared with 2024, falling from over 2,900 to around 1,200 deals.
Looking ahead, Pacific says they plan to take a step back from crypto and explore opportunities in pharmaceuticals, including hormone delivery and research on new estradiol drug formulations.
