Crypto Catastrophe: Bitcoin Treasury Stock Halved, Withdrawal Panic Ensues!
Datavault AI's shares plummeted nearly 50% after the company revealed its months-long failure to withdraw Bitcoin from the Biconomy exchange. This operational setback is intertwined with a substantial investment deal with Scilex Holding Company and has led to a declaration that its past financial statements for multiple quarters cannot be relied upon due to significant accounting issues.
The shares of Nasdaq-traded Datavault AI (DVLT) have experienced a substantial decline, losing almost 50% of their value following the company's disclosure of its inability to withdraw Bitcoin (BTC) from the cryptocurrency exchange Biconomy for approximately four months. On Tuesday, October 27, Datavault AI's shares closed at just $0.067 per share, marking a 49.55% loss in a single trading day. This sharp drop was accompanied by a significant surge in trading volume, with about 244 million shares traded compared to 30 million in the preceding session.
According to Datavault AI's filing with the U.S. Securities and Exchange Commission (SEC) on October 26, the company had initiated an application in June 2026 to transfer its Bitcoin from a digital wallet held by Biconomy Pte. Ltd. to another account. However, as of October 26, the withdrawal process remained incomplete. The filing did not provide specific reasons for the failure to complete the withdrawal, nor did it disclose the exact amount of Bitcoin that was involved in the attempted transaction.
This issue with the Bitcoin withdrawal arises after a significant investment deal struck in September 2025 between Datavault AI and Scilex Holding Company. This deal involved Bitcoin-denominated investments, where Scilex agreed to pay $150 million to acquire 15 million shares of Datavault, along with a pre-funded warrant for approximately 263.9 million additional shares. At the time of the agreement, the deal was valued at around 1,328.43 BTC, with one Bitcoin priced at $112,915.52.
Further details from the SEC filing reveal that Scilex transferred 1,309.04 BTC to Datavault's Biconomy wallet via off-chain transfers between September and November 2025, with the remaining difference accounted for by earlier cash advances. Subsequently, Datavault sold 491.431 BTC to Scilex, also through off-chain transfers, between September 2025 and January 2026, receiving approximately $40.5 million in cash in return.
Compounding its operational challenges, Datavault AI has also disclosed significant accounting issues. The company announced that its previously issued financial statements for the third quarter of 2025, the full fiscal year of 2025, and the first and second quarters of 2026 should no longer be relied upon. An internal review determined that the Bitcoin related to the Scilex investment should not have been classified as a digital asset on the balance sheet. Instead, Datavault AI will now recognize a subscription receivable linked to the issuance of shares. The company admitted that it had previously recorded Bitcoin balances as digital assets, which were mistakenly viewed as a source of the company's liquidity. The precise reason for the unsuccessful Bitcoin withdrawal remains unconfirmed at this time.