Datavault AI Plunges on Locked Bitcoin Disclosure

What to Know

Datavault AI shares plunged nearly 50 percent Tuesday after the company disclosed a bitcoin withdrawal problem tied to Biconomy.
The company said it has been unable to withdraw bitcoin from the Biconomy exchange since June.
Datavault AI closed at $0.067, down 49.55 percent, with roughly 244 million shares traded.
The issue is connected to a September 2025 agreement with Scilex Holding Company involving a $150 million purchase of Datavault shares and warrants using bitcoin.
Scilex credited 1,309.04 BTC to Datavault’s account at Biconomy through off-chain transfers.
Datavault later sold 491.4 BTC back to Scilex for about $40.5 million in cash.
The company now says the bitcoin credited through Scilex’s investment should have been recorded as an amount Scilex owed for the shares.
The accounting correction is expected to reduce reported assets by $92.2 million at the end of 2025 and $49 million as of June 2026.
Datavault had treated the bitcoin balances as funds available to support operations, but the unresolved withdrawal requires the company to reassess that assumption.

Datavault AI Shares Slide After Bitcoin Access Problem

Datavault AI suffered a severe market selloff Tuesday after investors reacted to the company’s disclosure that it had been unable to withdraw bitcoin from crypto exchange Biconomy since June and would need to restate its financial results. The stock finished at $0.067, down 49.55 percent, in a session marked by heavy activity of roughly 244 million shares traded.

The drop reflected immediate concern over both liquidity and accounting treatment. Datavault had treated bitcoin credited to its Biconomy account as cryptocurrency assets that could be used to help sustain operations. The company now says that treatment must be reassessed because the withdrawal request to an external account could not be completed and remained incomplete as of Monday’s filing.

For equity investors, the disclosure raised a direct question: whether bitcoin shown as available to the company was in fact accessible in the way management had previously assumed. That distinction matters because crypto balances held on an exchange can appear economically useful on paper, but the practical value depends on whether the holder can transfer, liquidate, or otherwise control those assets when needed.

The Scilex Transaction Behind the Dispute

The issue traces back to a September 2025 agreement with Scilex Holding Company. Under that agreement, Scilex agreed to purchase $150 million of Datavault shares and warrants using bitcoin. As part of the transaction, Scilex credited 1,309.04 BTC to Datavault’s account at Biconomy.

The transfers were handled off-chain. In crypto market terms, an off-chain transfer means balances are adjusted within an exchange or platform rather than being moved through recorded transactions on the Bitcoin blockchain. Such transfers can be faster and may avoid on-chain settlement steps, but they also require users to rely on the platform’s internal records and withdrawal process when they later seek to move assets outside the exchange.

Datavault subsequently sold 491.4 BTC back to Scilex for about $40.5 million in cash. The company later requested a withdrawal to an external account, but the transfer could not be completed when requested in June, according to the company’s disclosure. The company said the withdrawal remained incomplete as of Monday’s filing.

The inability to complete that withdrawal changed the company’s accounting assessment. Instead of treating the credited bitcoin as a cryptocurrency asset available to Datavault, the company now says the amount should have been recorded as an amount owed by Scilex for the shares. That change means the amount would reduce shareholders’ equity rather than appear among Datavault’s cryptocurrency assets.

Restatement to Cut Reported Assets

The accounting correction is expected to reduce Datavault’s reported assets by $92.2 million at the end of 2025 and $49 million as of June 2026. Those reductions are central to investor concern because they affect how the company’s balance sheet is presented and how much financial flexibility the market may believe the company has.

Datavault had counted the bitcoin balances as money it could draw on to keep the business running. With the withdrawal unresolved, the company must now revisit that assumption. In practical terms, funds that cannot be accessed cannot serve the same role as liquid capital, even if an exchange account shows a credited balance.

The restatement also highlights a broader risk for companies that use digital assets in financing transactions. When bitcoin is used as consideration for shares or warrants, the accounting and custody mechanics become critical. If a balance is credited internally by an exchange but cannot be withdrawn externally, management may have to reconsider whether the asset is under the company’s control or whether it should instead be treated as a receivable or amount owed by another party.

Biconomy’s Role in the Bitcoin Funding Chain

Biconomy was also involved in supplying the bitcoin behind the investment. Scilex’s June financial report said it sold $200 million of shares in its subsidiary Semnur to Biconomy for bitcoin. Scilex then used $150 million to purchase Datavault securities.

That sequence places Biconomy at the center of the bitcoin flow connected to the Datavault transaction. The company’s account at Biconomy received the credited bitcoin through off-chain transfers, and the later withdrawal issue emerged when Datavault sought to move assets to an external account.

Biconomy did not provide a response to questions about the withdrawal request and the bitcoin backing Datavault’s account as of Asian afternoon hours Wednesday. Without further clarification, investors are left to evaluate the situation based on Datavault’s filing and the known structure of the transactions.

Why Off-Chain Transfers Matter for Investors

Bitcoin is often discussed as a bearer-style digital asset, but many corporate crypto transactions still rely on intermediaries. When balances are moved off-chain, the transaction may not immediately appear on Bitcoin’s public ledger. Instead, the exchange or platform updates internal account balances.

That approach can be efficient, especially where counterparties already hold accounts on the same platform. However, it introduces an operational dependency. The credited party must be able to withdraw the balance, and the platform must be able and willing to process the transfer when requested. If that step fails, the credited balance may not function like directly held bitcoin in a self-custodied wallet.

For public companies, that distinction can have accounting consequences. A company may need to assess whether it controls the digital asset, whether the asset is readily available, and whether another party still effectively owes consideration. Datavault’s planned restatement reflects that type of reassessment.

Market Reaction Signals Trust Concerns

The nearly 50 percent drop in Datavault AI shares suggests investors treated the disclosure as more than a routine accounting adjustment. The combination of a large expected asset reduction, unresolved bitcoin access, and a need to revisit operating assumptions created a sharp confidence shock.

Market participants often respond harshly when a company’s reported assets become uncertain, particularly where those assets are linked to funding availability. If a company has relied on crypto balances as part of its operating runway, any inability to access those balances can raise questions about liquidity, financial controls, counterparty risk, and governance around digital asset custody.

The stock’s closing level of $0.067 and trading volume of roughly 244 million shares show the scale of the reaction. While the disclosure does not by itself resolve whether or when the bitcoin withdrawal issue may be settled, it forces investors to reprice the company around a materially different balance sheet presentation.

Crypto Treasury Risks Return to the Foreground

The Datavault AI episode underscores an important lesson for companies holding or receiving bitcoin: custody structure can be as important as market price. A bitcoin balance credited on a platform may not carry the same operational certainty as bitcoin that can be independently verified and moved on-chain.

Crypto treasury strategies have drawn attention as companies seek alternative funding methods, balance sheet diversification, or digital asset exposure. Yet this case shows that investors are likely to scrutinize not only how much bitcoin a company says it holds, but also where it is held, how it was received, whether it was transferred on-chain, and whether it can be withdrawn without delay.

For Datavault, the immediate challenge is the restatement and the reassessment of funds previously treated as available for operations. For the broader market, the case is a reminder that exchange-based balances, off-chain credits, and complex investment structures can introduce risks that may not be obvious until a withdrawal is attempted.

Frequently Asked Questions (FAQs)

Why did Datavault AI shares fall so sharply?

Datavault AI shares fell nearly 50 percent after the company disclosed that it had been unable to withdraw bitcoin from Biconomy since June and would need to restate its financial results.

What was Datavault AI’s closing stock price?

Datavault AI closed at $0.067, down 49.55 percent, with roughly 244 million shares traded during the session.

How is Scilex involved in the transaction?

Scilex Holding Company agreed in September 2025 to purchase $150 million of Datavault shares and warrants using bitcoin, and credited 1,309.04 BTC to Datavault’s Biconomy account through off-chain transfers.

What is an off-chain bitcoin transfer?

An off-chain transfer adjusts balances inside an exchange or platform rather than moving bitcoin through a transaction recorded on the Bitcoin blockchain.

How much bitcoin did Datavault sell back to Scilex?

Datavault sold 491.4 BTC back to Scilex for about $40.5 million in cash before the unresolved withdrawal issue became central to the company’s accounting reassessment.

How much will the restatement reduce reported assets?

The correction is expected to reduce reported assets by $92.2 million at the end of 2025 and $49 million as of June 2026.

Why is the accounting treatment changing?

Datavault now says the bitcoin credited through Scilex’s investment should have been recorded as an amount owed by Scilex for the shares, rather than as cryptocurrency assets available to the company.

Why does bitcoin custody matter for public companies?

Custody matters because a credited crypto balance may not be useful as operating capital if the company cannot withdraw or control the asset when needed.