Crypto Firm Entropy Shuts Doors, Admits No Path to Scale

Crypto News Business

Written by Aaron S.,

Editor-In-Chief

Last Updated: January 26, 2026

Key Takeaways

Entropy, a crypto startup backed by Andreessen Horowitz and Coinbase Ventures, is closing and refunding investors after failing to scale;
CEO Tux Pacific said that years of pivots and layoffs had not given the company a clear path forward;
The firm’s final product, an AI-based crypto automation tool, struggled to reach venture-scale potential.

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Crypto Firm Entropy Shuts Doors, Admits No Path to Scale

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Entropy, a blockchain company backed by major investors, is ending its operations and returning the remaining funds to supporters.

Founder and CEO Tux Pacific explained in a post on X that after years of effort, the platform no longer has a clear direction to continue.

Pacific said, "After four years, several pivots, and two rounds of layoffs, I’ve decided to wind up Entropy and return capital to our investors".

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Entropy started in late 2021 as a decentralized self-custody service for digital assets. The project secured $25 million in seed funding from Andreessen Horowitz and Coinbase $1.65B Ventures in mid-2022.

Over time, the company shifted focus several times. By the second half of 2025, Entropy was building a crypto automation platform that used artificial intelligence (AI) to simplify workflows, similar to tools like Zapier.

However, Pacific said market feedback indicated the model was too small-scale for venture investment. This forced a difficult decision: to attempt another major pivot or bring the project to an end.

In the end, Pacific said, "After four hard years working in crypto, I decided that the best I could do has already been done: it was time to close up shop".

Meanwhile, Nifty Gateway, an early player in the non-fungible token (NFT) industry, announced it will cease operations on February 23, 2026. What happened? Read the full story.