Corporate Bitcoin treasury firm Datavault AI (DVLT) shares fell 49.55% to $0.067 after disclosing in an SEC filing that it has been unable to withdraw its cryptocurrency reserves from exchange Biconomy since requesting a transfer in June. The disclosure follows earlier turbulence surrounding a $150 million Bitcoin transaction with Scilex.
Unwithdrawable Exchange Balance and SEC Disclosure
Datavault filed a Form 8-K with the SEC on October 26, detailing custodial issues with its digital assets. According to the filing, the company received $150 million in Bitcoin from Scilex on September 25, 2025, under an equity purchase agreement. The transaction valued Bitcoin at approximately $112,915 per unit, representing roughly 1,328 BTC. However, after subtracting 19.39 BTC for cash advances made by Scilex, 1,309.04 BTC was credited to Datavault's account at Biconomy.
Datavault subsequently returned 491.431 BTC to Scilex across September 2025 and January 2026 in exchange for $40.5 million in cash. Crucially, all transfers were processed off-chain on Biconomy's internal books rather than on the public Bitcoin network. Datavault submitted a withdrawal request to move the remaining assets to an external wallet in June, but the transfer remained incomplete at the time of the 8-K filing, with Biconomy offering no explanation for the delay.
Going Concern Assessment and Market Reaction
Following a post-transaction review, Datavault determined that the Bitcoin acquired from Scilex failed to meet necessary accounting criteria for recognition as a company digital asset. Because management relies on BTC as a primary cash source and cannot guarantee collection from Scilex, the leadership team is currently reassessing whether the company can remain in business.
Market reaction to the regulatory filing on October 28 was immediate:
- DVLT shares closed down 49.55% at $0.067, after dropping to an intraday low of $0.060.
- The company's total market capitalization decreased to approximately $65 million, before shares rebounded slightly to $0.071 in after-hours trading.
- The situation highlights previous warnings by Smarter Web Company CEO Andrew Webley, who noted that treasury companies expose equity holders to custodian risk and executive financing choices.
Why It Matters
Datavault's withdrawal failure illustrates the severe risk of keeping balance-sheet cryptocurrency on off-chain exchange ledgers rather than in self-custodied storage. For public companies adopting Bitcoin treasury strategies, reliance on exchange custodians creates counterparty hazards that can rapidly undermine solvency and trigger regulatory restatements. Market participants will watch whether legal actions or asset recovery attempts can restore Datavault's operational viability.
