Crypto startup Entropy has decided to end its business after four years and return invested funds, Cointelegraph reported on Jan. 26 local time.

Entropy developed a crypto automation platform but decided to shut down because it failed to find a scalable business model.

Entropy CEO Tux Pacific said, "After 4 years of operations and several rounds of downsizing, we decided to wind up the company and return capital to investors."

Entropy started in late 2021 as a decentralised asset custody solution. It raised $25 million in seed funding with participation from Andreessen Horowitz (a16z) and Coinbase Ventures.

Pacific said, "From the second half of 2025, we developed an AI-integrated crypto automation platform, but initial feedback concluded the business model was not scalable." He added, "In the end, the only options left were to find a new direction or shut down the business."

News of Entropy's closure is drawing attention alongside a decision by decentralised social networking protocol Farcaster, backed by a16z, to return $180 million to investors after being acquired by infrastructure provider Neynar. Farcaster co-founder Dan Romero said, "The platform is not shutting down but will pivot toward a developer-focused direction."