Crypto startup Entropy, backed by Andreessen Horowitz (A16z) and other major investors, is closing its doors after realizing its business model couldn’t reach venture-level returns.
Founder and CEO Tux Pacific, who launched the company in late 2021, explained that the team ran out of viable options and sees no path forward. As part of the wind-down, all remaining funds will be returned to investors.
Entropy began as a decentralized custody platform, raising $25 million in a 2022 seed round led by Coinbase Ventures and Dragonfly Capital. Over the years, the startup went through several pivots before focusing on crypto automation, building an AI-integrated platform designed to serve as a decentralized alternative to tools like Zapier.
Despite the innovation, Pacific said early feedback revealed the business model simply wasn’t “venture scale,” leading to the difficult decision to close.
“After four hard years working in crypto, I decided the best I could do has already been done. It was time to close up shop,” Pacific said. He added that he will exit the crypto space and explore opportunities in pharmaceuticals.
Entropy’s shutdown is part of a broader trend of crypto project closures in 2025. Earlier in the year, Linear Finance, backed by NGC Ventures, shut down after financial struggles and a sudden Binance delisting. The Web3 gaming sector also saw failures, with games like Ember Sword, Deadrop, Nyan Heroes, and Tatsumeeko unable to survive harsh funding conditions and low user engagement.
The closure highlights the challenges startups face in crypto, particularly around building business models that can deliver the kind of scale venture investors expect.
 and other major investors, is closing its doors after realizing its business...){kind=link}