Entropy, a decentralized custody startup founded in 2021, is ceasing operations and will return money to its investors. The announcement was made by Tux Pacific, the founder and CEO, on social media platform X, citing a lack of a viable business model as a major factor in the decision. The company, which raised $25 million in a seed round in June 2022, struggled to find a scalable approach despite developing a crypto automation platform similar to tools like n8n and Zapier.
Initially, Entropy had raised a total of approximately $27 million after securing $1.95 million in a pre-seed round earlier in January 2022. The startup aimed to provide a decentralized alternative to major custodians by utilizing advanced cryptographic techniques, allowing users to manage their cryptocurrencies flexibly. However, following several pivots and two rounds of layoffs, Pacific decided it was time to close the venture after four challenging years in the crypto landscape.
Pacific, who has a background as a self-taught cryptographer and is a college dropout, expressed gratitude to a16z crypto and others for their support during the winding down process. Despite the challenges faced, Pacific remains proud of the journey, stating, “I've never once given up in my career.”