Entropy, a decentralized custody startup led by a16z, has announced its closure and will return remaining funds to investors. Entropy founder and CEO Tux Pacific stated on the X platform that the decision was made after four years of product development, multiple business adjustments, and two rounds of layoffs. Entropy positioned itself as an alternative to centralized crypto custody institutions, utilizing technologies such as multi-party computation, threshold cryptography, and trusted execution environments to provide users with cross-chain asset management and automated signature services. The company completed a $25 million seed round in 2022 led by a16z, with participation from investors including Dragonfly, Variant, and Coinbase Ventures, bringing its total funding to approximately $27 million. Pacific stated that recent research revealed the business model was unsustainable for venture capital-level growth, leading to the decision to cease operations and return capital. This event also reflects the increasingly challenging environment for crypto startups since 2025. (TheBlock)