Key Highlights
- Datavault AI (DVLT) shares plummeted by nearly 50% following disclosures of trapped bitcoin reserves and upcoming financial restatements.
- The company revealed it has been unable to withdraw its bitcoin holdings from cryptocurrency exchange Biconomy since June.
- The halted withdrawals stem from a complex $150 million transaction involving Scilex Holding Company, subsidiary Semnur, and off-chain ledger transfers.
Datavault AI Shares Plummet Amid Bitcoin Withdrawal Freezes
Shares of Datavault AI (DVLT) experienced a severe market sell-off on Tuesday, cratering by nearly 50% following a regulatory disclosure that the enterprise cannot access its cryptocurrency holdings stored on the Biconomy exchange. The stock concluded regular trading down 49.55% at $0.067, driven by massive volume exceeding roughly 244 million shares changing hands. Alongside the inaccessible digital assets, the company confirmed that it will be forced to restate its financial results, compounding investor anxieties over its balance sheet integrity.
Origins of the Biconomy Exchange Dispute and Scilex Agreement
The liquidity disruption originates from a multi-party arrangement struck in September 2025 with Scilex Holding Company. Under the original terms of the transaction, Scilex entered into an agreement to acquire $150 million worth of Datavault AI shares and warrants funded through bitcoin. Rather than settling via direct on-chain activity, Scilex credited 1,309.04 BTC to Datavault AI’s internal account at Biconomy via off-chain transfers—a process that merely adjusted account ledgers internally inside the trading venue rather than validating transactions across the public Bitcoin blockchain.
Following this initial transfer, Datavault AI moved to monetize part of the position, selling 491.4 BTC back to Scilex to secure approximately $40.5 million in cash. However, severe complications materialized when Datavault AI attempted to move its remaining digital balance into an external custodial wallet. In June, the enterprise submitted a formal withdrawal request, yet the transaction could not be completed. According to the company’s Monday regulatory filing, the transfer remains unfulfilled, leaving the remaining funds inaccessible.
Intertwined Corporate Dealings Behind the Digital Asset Flow
The regulatory filing further sheds light on the circular pipeline of digital assets involving exchange operator Biconomy. Biconomy was directly instrumental in providing the underlying bitcoin used to finance Scilex’s investment. According to financial statements released by Scilex in June, Scilex offloaded $200 million worth of equity in its subsidiary Semnur to Biconomy in exchange for bitcoin. Scilex then routed $150 million of that newly acquired cryptocurrency capital toward the acquisition of Datavault AI securities, relying heavily on Biconomy’s internal ledger systems to execute the multi-million-dollar corporate transaction.
Why This Matters
This incident underlines the operational risks public corporations assume when holding treasury reserves or conducting large corporate share purchases via centralized cryptocurrency platforms rather than native on-chain custodians. Because off-chain internal transfers do not reflect verifiable movement on the public Bitcoin ledger, counterparty risks and exchange-level solvency hurdles can leave corporate treasuries immobilized. As Datavault AI prepares to restate its past financial disclosures, the dispute highlights impending audit scrutiny for companies relying on non-custodial or ledger-only exchange balances to underpin enterprise valuations.
Frequently Asked Questions
Why did Datavault AI (DVLT) stock experience a steep decline?
Datavault AI stock dropped 49.55% after the company disclosed that it has been unable to withdraw its bitcoin holdings from cryptocurrency exchange Biconomy since June and will be forced to restate its official financial results.
How did Datavault AI acquire the trapped bitcoin?
The bitcoin originated from a September 2025 agreement where Scilex Holding Company agreed to purchase $150 million in Datavault AI shares and warrants using bitcoin. Scilex originally obtained the bitcoin by selling $200 million of shares in its subsidiary, Semnur, to Biconomy.
What are off-chain transfers in this context?
Off-chain transfers mean that the 1,309.04 BTC balance credited by Scilex to Datavault AI was accounted for only within Biconomy’s internal systems rather than executed as verifiable transactions recorded directly on the Bitcoin blockchain. As a result, when Datavault AI attempted to move the assets out of the exchange to an external address, the withdrawal failed to process.
