A16z-Backed Entropy to Shut Down and Refund Investors

Highlights:

• A16z-backed Entropy’s founder, Pacific, has announced that the company will be shutting down.
• Investors to receive refunds as part of plans to close the company’s operations.
• Pacific said he will take a break from crypto and might consider a career in the pharmaceutical industry.

Entropy, a crypto startup founded by Voltairine Novatore Pacific, is officially shutting down after operating for four years with two rounds of staff reductions. Pacific disclosed the decision in an X post on January 24. He also confirmed plans to refund investors. The decision follows a long period of testing several ideas and developing new products in the crypto space.

In the second half of 2025, Entropy rolled out a new product to help users automate crypto tasks. The platform was designed to operate like a common automation tool for blockchain use cases with advanced security features like shared key signing, built-in artificial intelligence (AI) support, and protected computing systems. 

Early feedback indicated that the product worked effectively. However, its operations could not meet the demands of companies that are large enough to meet venture investment expectations. This forced the founder to either change the product’s business model or completely shut down the company. He eventually opted for the latter after carefully analyzing both options.

The Entropy founder stated:

“After four years working in crypto, I decided that the best I could do had already been done: it was time to close up.”  

❌Entropy Shuts Down, Returns Capital

Entropy (@entropydotxyz), a decentralized custody startup backed by @a16zcrypto, is shutting down and returning capital to investors, founder and CEO @__tux announced. The company raised ~$27M total, including a $25M seed round in 2022.… pic.twitter.com/NqQZUH7QsH

— ME Group (@MetaEraHK) January 26, 2026

Pacific Hints at Leaving the Crypto Space as A16Z-Backed Entropy Prepares to Shut Down

Pacific described the decision to shut down Entropy as difficult but calm. He also heaped strong praise on the company’s remaining team members. According to him, the group comprises a highly skilled software engineer, a results-driven product marketer, and a solid product designer. 

Meanwhile, as Entropy prepares to shut down operations, the founder plans to take time off crypto to rest, research, and focus on other creative works. Pacific noted that the break will be used to decide what comes next after Entropy. He also spoke about his interest in pharmaceuticals, particularly hormone delivery.       

Pacific stated:

“I want to innovate on hormone delivery, for women who experience menopause and trans women for HRT. I will be spending time validating research on new Estradiol drug formulations, as well as biophysics and organic chemistry.”

I am winding-up Entropy.

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

For the latter half of 2025, the Entropy team was hard at work on a crypto automations platform (basically n8n/zapier/etc…

— tux pacific (@__tux) January 24, 2026

Several Factors Push Crypto Firms to Shut Down Operations

Entropy is not the first crypto-focused firm to end operations. On December 2, 2025, Crypto2Community reported that Huione Pay, a Cambodian financial services provider, shut down services and delayed investors’ repayments. The company explained that the shutdown was due to massive withdrawal requests that overwhelmed its systems. 

Huione Pay, however, introduced two long-term repayment options that sparked widespread criticism. First, users could move their balances to high-yield financial products. This offer promised full repayment within 18 months, with a monthly interest rate. The second option was to allow withdrawals after a six-month wait. In this setup, the company planned to refund customers in monthly instalments.  

Bunni, a Decentralized Exchange (DEX) platform, also closed down in October last year after losing $8.4 million through a hack incident. Bunni DEX cited a lack of liquidity and manpower as the main reasons for the decision. Despite the shutdown, users were allowed to withdraw their assets. The DEX platform also planned to distribute leftover treasury assets among BUNNI, LIT, and veBUNNI holders.