A16z-supported Crypto container to close the startup
Crypto reporter
Shalini Nagarajan
Crypto reporter
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Entropy, a decentralized crypto-storage startup backed by Andreessen Horowitz (a16z), plans to scale back and return remaining capital to investors, according to founder and CEO Tux Pacific.
Pacific wrote on X over the weekend: “I'm Twisted Entropy. After four years of multiple pivots and two rounds of layoffs, I've decided to spin off Entropy and return capital to our investors.”
Crypto automation bets fall short after investor feedback
The termination follows a late push by 2025 to transform the company around a crypto automation platform that Pacific described as “basically n8n/zapier/etc for crypto” with auto-signatures based on native cryptography, secure computation using secure execution environments, and “deep AI integrations.”
That product direction still hasn't cleared the venture-style growth bar. “After the first feedback request confirmed that the business model was not venture scale, I was left with the choice of going forward or going private,” Pacific wrote.
Entropy attracted attention in It first gained attention in 2022 when it raised $25 million in a seed round led by a16z crypto, with participation including Dragonfly Capital, Coinbase Ventures, Robot Ventures, Ethereal Ventures, Variant and Inflection. The company previously raised a $1.95M pre-seed round.
Founder looks beyond digital assets to pharmaceutical research
At launch, Entropy positioned itself as a decentralized alternative to security providers like Firefox and Coinbase, relying on cryptographic approaches such as multi-party calculations to let users control how funds move, including regulatory restrictions.
Pacific also thanked a16z crypto and Guy Wuollet for helping guide Wind Down, calling their guidance “invaluable.”
The shutdown comes amid a tough funding climate for early-stage crypto startups. Crypto venture deal count is down 60% year-over-year in 2025, falling from over 2,900 to 1,200 transactions in 2024.
Pacific went on to say that they plan to step back before deciding what comes after Entropy. “My time in crypto may be coming to an end, I feel myself especially going into pharmaceuticals,” he wrote, adding that he wants to work on hormonal birth control and confirm research into new estradiol drug formulations.
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