{"id":5997,"date":"2026-01-26T06:40:06","date_gmt":"2026-01-26T06:40:06","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=5997"},"modified":"2026-01-26T06:40:06","modified_gmt":"2026-01-26T06:40:06","slug":"crypto-custody-startup-entropy-shuts-down-returns-capital-after-27m-raised","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=5997","title":{"rendered":"Crypto Custody Startup Entropy Shuts Down, Returns Capital After $27M Raised"},"content":{"rendered":"

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  • Entropy is shutting down after four years and returning capital to investors because its latest product, a crypto automation platform, failed to meet venture scaling expectations.<\/span><\/li>\n
  • The startup raised roughly US$27 million in funding from high-profile backers like a16z and Coinbase Ventures but ultimately decided to close rather than attempt another pivot.<\/span><\/li>\n
  • Founder Tux Pacific is stepping away from the crypto industry to potentially explore pharmaceutical research following a significant 60% decline in crypto venture deals during 2025.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n

    Entropy, a decentralised custody startup backed by Andreessen Horowitz, is shutting down and returning remaining capital to investors, founder and CEO Tux Pacific said on X.<\/p>\n

    Pacific said the company is closing after four years of work that included multiple pivots and two rounds of layoffs.\u00a0<\/p>\n

    Notably, Entropy\u2019s most recent product was a crypto automation platform, something similar to what users do with platforms like n8n or Zapier for on-chain workflows, with automated transaction signing using threshold cryptography, secure execution using trusted execution environments (TEEs), and AI integrations.<\/p>\n

    But Pacific said feedback showed the business would not scale to venture expectations, leaving another pivot or a shutdown.<\/p>\n

    \n
    \n

    I was left with the choice to find a creative way forward or pivot once more. After four hard years working in crypto, I decided that the best I could do has already been done: it was time to close up shop.<\/em><\/p>\n<\/div>\n

    \n Tux Pacific, Entropy Founder. <\/div>\n<\/div>\n

    Related: UBS CEO: Blockchain\u2019s Takeover of Traditional Banking Is Inevitable<\/strong><\/p>\n

    Entropy Shuts Down After Raising $25M<\/h2>\n

    Entropy raised a US$25 million (AU$38.25 million) seed round in June 2022, led by a16z crypto, with participation from Dragonfly Capital, Coinbase Ventures, Robot Ventures, Inflection and other high-profile VCs.\u00a0<\/p>\n

    It had raised a US$1.95 million (AU$2.98 million) pre-seed in January 2022, bringing total funding to roughly US$27 million (AU$41.31 million).<\/p>\n

    Before pivoting to AI and automation, the company was initially marketed as a decentralised alternative to custodians such as Fireblocks and Coinbase, so the original pitch relied on multi-party computation and related cryptographic methods to let users manage funds across blockchains while setting rules on how assets could move, including time-based constraints.<\/p>\n

    The shutdown comes during a weaker crypto venture cycle. Crypto venture deal count fell about 60% in 2025 to roughly 1,200 transactions from more than 2,900 in 2024.<\/p>\n

    Read more: Bitcoin Whipsaws Higher After Trump Signals Greenland Deal, Drops EU Tariff Threat<\/strong><\/p>\n<\/p><\/div>\n

    Crypto Custody#Crypto #Custody #Startup #Entropy #Shuts #Returns #Capital #27M #Raised1769409606<\/p>\n","protected":false},"excerpt":{"rendered":"

    Entropy is shutting down after four years and returning capital to investors because its latest product, a crypto automation platform, failed to meet venture scaling expectations. The startup raised roughly US$27 million in funding from high-profile backers like a16z and Coinbase Ventures but ultimately decided to close rather than attempt another pivot. Founder Tux Pacific<\/p>\n","protected":false},"author":1,"featured_media":5998,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[1768,1648,62,994,1766,1769,1610,1767,1765],"class_list":{"0":"post-5997","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"tag-27m","9":"tag-capital","10":"tag-crypto","11":"tag-custody","12":"tag-entropy","13":"tag-raised","14":"tag-returns","15":"tag-shuts","16":"tag-startup"},"yoast_head":"\nCrypto Custody Startup Entropy Shuts Down, Returns Capital After $27M Raised - Crypto News: Latest Cryptocurrency News and Analysis<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptonews.uk.com\/?p=5997\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Crypto Custody Startup Entropy Shuts Down, Returns Capital After $27M Raised\" \/>\n<meta property=\"og:description\" content=\"Entropy is shutting down after four years and returning capital to investors because its latest product, a crypto automation platform, failed to meet venture scaling expectations. 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