Entropy crypto custody startup closes after four years

Entropy, a crypto custody startup backed by a16z, is closing after four years, returning $27M to investors as its automation platform failed to scale for venture growth.

Entropy, a decentralized crypto custody startup, is shutting down after four years and will return remaining capital to investors. The company raised about $27 million from major backers, including Andreessen Horowitz (a16z) and Coinbase Ventures. Entropy’s latest product—a crypto automation platform—failed to achieve the scale needed for venture-backed growth. The platform offered automated transaction signing with threshold cryptography, secure execution via trusted environments, and AI integrations. Despite several pivots and two rounds of layoffs, feedback indicated the business could not scale sufficiently. Founder Tux Pacific announced the closure, stating that after significant effort, it was time to close rather than attempt another pivot. Pacific also mentioned leaving the crypto industry, possibly to pursue pharmaceutical research, amid a broader decline in crypto venture deals in 2025.