Entropy, a decentralized custody startup that raised $25 million in a seed spherical led by Andreessen Horowitz in 2022, is shutting down and returning capital to buyers, founder and CEO Tux Pacific introduced on X.
Pacific stated the choice got here after 4 years of constructing, “a number of pivots, and two rounds of layoffs.” The corporate was most lately creating a crypto automations platform, described as just like n8n or Zapier however designed for crypto, that includes automated signing utilizing threshold cryptography, safe computation by way of trusted execution environments (TEEs), and AI integrations.
“After an preliminary suggestions request revealed that the enterprise mannequin wasn’t enterprise scale, I used to be left with the selection to discover a inventive approach ahead or pivot as soon as extra,” Pacific wrote. “After 4 arduous years working in crypto, I made a decision that the most effective I may do has already been completed: it was time to shut up store.”
Entropy raised its $25 million seed spherical in June 2022, with participation from Dragonfly Capital, Ethereal Ventures, Variant, Coinbase Ventures, Robotic Ventures, Inflection, and the Komerabi Fund. The corporate had additionally raised a $1.95 million pre-seed spherical earlier that yr in January, bringing complete funding to roughly $27 million.
Pacific, a self-taught cryptographer who beforehand labored at NuCypher, based Entropy in 2021. The founder’s unconventional background drew consideration when Entropy first raised: Pacific is a school dropout, a transgender advocate, and a self-described “anti-capitalist anarchist” who nonetheless believes in free-market ideas rooted in Bitcoin’s early days.
The startup was initially positioned as a decentralized various to centralized crypto custodians like Fireblocks and Coinbase. Entropy leveraged cryptographic strategies primarily based on multiparty computation to permit customers to deposit and handle cryptocurrencies throughout blockchains whereas implementing their very own guidelines for interacting with funds, comparable to time-gated constraints.
Regardless of their anti-capitalist politics, Pacific discovered a house in crypto. “I’ve by no means felt I have been in an area the place it has been extra acceptable for folks to be so completely different,” Pacific advised TechCrunch in 2022. “In the event you go to a [crypto] convention, it is simply stuffed with bizarre, bizarre folks.”
Pacific thanked a16z crypto and Man Wuollet for his or her steering all through the wind-down course of.
“I’ve by no means as soon as given up in my profession. The one factor I’ve ever stop was school, so this makes the second factor,” Pacific wrote. “It is difficult, however I discover peace in the truth that a profession is a apply: the aim will not be the vacation spot, however the journey of innovation.”
Entropy’s closure provides to a broader pattern of crypto startup shutdowns in 2025. Crypto enterprise deal depend fell roughly 60% yr over yr in 2025, dropping to about 1,200 transactions from greater than 2,900 in 2024, in keeping with The Block Professional knowledge.
Trying forward, Pacific stated they plan to take a break earlier than doubtlessly pivoting away from crypto completely. “My time in crypto could be coming to an finish, as I really feel myself drawn particularly into prescription drugs: I wish to innovate on hormone supply, particularly for ladies who expertise menopause and trans ladies for HRT,” Pacific wrote, including they are going to be spending time validating analysis on new estradiol drug formulations.
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