a16z-backed crypto custody startup Entropy to shut down, refund investors
Founder Tux Pacific said the four-year project will wind down after multiple pivots and return remaining capital to investors [1][2].
Entropy, a crypto custody startup backed by Andreessen Horowitz (a16z) and other venture firms, is winding down operations and will return remaining capital to investors, founder and CEO Tux Pacific said in a public post on X [1][2][3][4].
Pacific wrote that after four years, several pivots and two rounds of layoffs the team was unable to find a scalable business model, prompting the decision to wind up the company and refund investors [1][2][4].
Entropy launched in late 2021 and spent its lifespan searching for a product that could reach scale; the startup had previously raised capital (reported at $25 million) from a16z and other prominent firms before choosing to return remaining funds [3][2].
The closure marks the end of Entropy’s four-year run in crypto custody; the founder has committed to returning investor capital as the company winds down its operations [1][2].
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Citations
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- 1A16z-backed crypto startup Entropy to shut down, refund investorsCointelegraph• Jan 26, 2026
- 2a16z-backed Entropy shuts down, promises investors refundsCryptopolitan• Jan 25, 2026
- 3Crypto Startup Entropy Shuts Down, Returns Investor CapitalTheCoinrise.com• Jan 26, 2026
- 4a16z-Backed Crypto Custody Startup to Shut Down, Return Investor FundsCryptoNews• Jan 26, 2026
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