Entropy, a decentralized custody startup backed by a16z, has announced its closure and will return remaining funds to investors. CEO Tux Pacific stated that after multiple pivots and two rounds of layoffs, the company was unable to find a business model suitable for venture capital scale. Founded in 2021, Entropy raised approximately $27 million, including a $25 million seed round led by a16z crypto in 2022 and a prior $1.95 million pre-seed round.