On January 26, The Block reported that Entropy, a decentralized custody startup backed by a16z, announced it would be shutting down and returning the remaining funds to investors.
Entropy founder and CEO Tux Pacific stated that after four years of operation, multiple business shifts, and two rounds of layoffs, the company failed to find a business model that met the scale of venture capital investment. After initial market feedback indicated that its business model was not suitable for venture capital investment, the company decided to cease operations.
Entropy reportedly completed a $25 million seed funding round in June 2022, led by a16z crypto, bringing its total funding to approximately $27 million. The company initially positioned itself as a decentralized alternative to centralized custodians like Fireblocks and Coinbase, but later shifted its focus to developing a crypto automation platform.
