Entropy, a decentralized custody startup invested by a16z, announced its closure

Entropy, a decentralized custody startup led by a16z, announced its closure and will return the remaining funds to investors. Entropy founder and CEO Tux Pacific stated on X platform that the decision was made after four years of product development, multiple business adjustments, and two rounds of layoffs. Entropy was once positioned as an alternative solution to centralized encryption custody institutions, providing cross chain asset management and automated signature services using technologies such as multi-party computation, threshold cryptography, and trusted execution environments. The company completed a seed round financing of $25 million led by a16z in 2022, with a total financing of approximately $27 million. Pacific stated that recent research has found that this business model is difficult to support growth at the venture capital level, so it has chosen to cease operations and return capital.