PANews reported on January 26 that Entropy, a decentralized custody startup backed by a16z, announced it will shut down and return remaining funds to investors. Founder and CEO Tux Pacific stated that after four years of operation, multiple business shifts, and two rounds of layoffs, the company failed to find a business model commensurate with its venture capital investment.

Entropy completed a $25 million seed funding round in June 2022, led by a16z crypto, bringing its total funding to approximately $27 million. The company initially positioned itself as a decentralized alternative to centralized custodians like Fireblocks and Coinbase, but later shifted its focus to developing a crypto automation platform. The founders stated that after initial market feedback indicated its business model was not worthy of venture capital investment, they decided to cease operations.