I have been closely observing the crypto industry for the past few years, and it appears that the current market downturn is beginning to rival the slump in 2022.
During the 2022 fiasco, major crypto companies such as FTX, BlockFi, Voyager Digital, and Three Arrows Capital went bankrupt.
Several other companies were forced to wind down certain operations or cut their workforce.
The market slump following the crash on Oct. 10, 2025, has also left a trail of shutdowns and layoffs across the crypto industry, with little evidence of improvement.
Last year we saw DappRadar, a popular decentralized application (dApp) analytics platform, and Cryptomixer shutting down.
In January 2026 crypto companies, OKX, MANTRA, and Polygon Labs decided to reduce staff as part of structural reset.
As reported earlier, a popular non-fungible token (NFT) platform called Nifty Gateway also shut down amid sharp criticism from users over asset withdrawals.
Now, it has come to attention that a popular crypto startup has also decided to shut shop.
Entropy was founded in 2021 as a decentralized self-custody crypto solution. It relied on advanced cryptography based on multiparty computation to let users manage crypto on different blockchains without a single point of control, giving them more control over how their funds were handled.
The startup raised $25 million from Andreessen Horowitz, Ethereal Ventures, Variant, and Coinbase Ventures, among others, in 2022.
However, founder and CEO Tux Pacific said on Jan. 24 that he is winding down Entropy.
The last four years have seen several pivots and two rounds of layoffs, forcing him to shut shop and return capital to our investors, he added.
Though the Entropy team was working on an AI-driven crypto automations platform during the latter half of 2025, it turned out that the business model wasn’t venture scale, Pacific revealed.
That's when he decided the best step forward was to wind down, he added.
Pacific hailed his teammates and said he himself will take a break to do research on my next venture and relax.
This story was originally published by TheStreet on Jan 26, 2026, where it first appeared in the Bankruptcy News & Analysis section. Add TheStreet as a Preferred Source by clicking here.