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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].

Jan 26, 202610:20 AMNewsroom AI

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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