Datavault AI (NASDAQ: DVLT) lost nearly half of its market value on Tuesday after disclosing that it has been unable to withdraw the Bitcoin it holds on the Biconomy exchange for roughly four months. Alongside the failed recovery attempt, the company warned that financial statements stretching back more than a year can no longer be regarded as fully accurate.

Why did Datavault's stock crash?

DVLT fell about 49.6% in a single session, from $0.133 to a close of $0.067, according to Google Finance data. Trading volume surged roughly eightfold, with around 250 million shares changing hands.

The selloff was triggered by an 8-K — the disclosure form public companies use to report material events — filed with the U.S. Securities and Exchange Commission (filing), which revealed that a June 2026 request by Datavault to withdraw Bitcoin from its Biconomy wallet to an outside account remained unprocessed as of the October disclosure. The filing gave no reason for the withdrawal having now been pending for four months.

The shockwaves spread through the Bitcoin community, drawing the attention of Bitcoin developer Jameson Lopp. Writing on X, Lopp said Datavault “just crashed because they informed investors that they haven’t been able to withdraw BTC from the exchange” while it holds its funds there, and noted that the transfer requests had been on hold for four months (source).

For crypto holders, the situation illustrates a core tenet of custody: coins held on an exchange exist only as a claim against the platform until they are withdrawn to an on-chain address the holder controls — the distinction behind the long-running industry adage “not your keys, not your coins.”

Datavault, Scilex and Biconomy have not commented publicly on the news.

How Scilex entered the picture

In September 2025, Scilex Holding Company struck a deal with Datavault to pay $150 million for 15 million DVLT shares, plus a pre-funded warrant covering 263,914,094 additional shares. The price was set in Bitcoin — about 1,328.43 BTC at a spot rate of $112,915.52 per coin.

The transfer never appeared on the public Bitcoin blockchain because Scilex credited 1,309.04 BTC directly to Datavault's Biconomy wallet. Instead, balances simply changed within the exchange. Per the 8-K filing, the 19.39 BTC shortfall in the transfer was attributable to cash advances Scilex had made.

Between September 2025 and January 2026, Datavault sold 491.431 of those coins back to Scilex for about $40.5 million. In a separate June 2026 deal, the two companies signed a term sheet (8-K) under which Scilex would acquire 837 BTC from the Biconomy wallet for $50 million. The new SEC filing now warns that this transaction might never close.

Why the books have to be restated

Datavault's audit committee cited an accounting error related to the Scilex deal as the reason four sets of financial statements — from Q3 2025 to Q2 2026 — should no longer be regarded as accurate.

After reviewing the transaction, the company determined that the Bitcoin never qualified as a digital asset on its books. The filing states that the amount should instead have been booked as a subscription receivable from the share issuance — a figure that reduces stockholders' equity rather than padding the asset side of the balance sheet.

The correction is steep. Datavault expects the restatements to cut total assets by $8.1 million, $92.2 million, $57.1 million and $49.0 million as of September 30, 2025, December 31, 2025, March 31, 2026 and June 30, 2026, respectively.

Behind the numbers sits a liquidity problem. Management had treated those Bitcoin balances as cash it could draw on to keep operating. With the coins no longer counted as an asset and collection from Scilex uncertain, the company said it is reworking its going concern assessment — the standard check on whether a company can fund its operations over the coming year.

Where the Bitcoin came from

The Bitcoin at the center of the dispute passed through Biconomy before it ever reached Datavault. Scilex's own disclosures show it raised $200 million in Bitcoin by selling stock in its subsidiary Semnur Pharmaceuticals, then routed $150 million of that into the Datavault purchase. Reports name Biconomy as the buyer on the Semnur side.

Both companies had been building ties to the exchange this year. Datavault announced plans in April to list a meme coin portfolio and real-world asset tokens on Biconomy (announcement), and Scilex planned to list its own “Dream Bowl” meme coin there (press release). Biconomy, founded in 2019, says it serves more than 10 million users across over 180 countries.

The episode lands as investors sour on Bitcoin treasury companies more broadly. Cryptopolitan reported in January that about 40% of the top 100 such firms were trading below the value of their Bitcoin holdings — a reversal from the premiums that once let them raise equity and buy more coins (report). For Datavault, three questions remain open: whether Biconomy processes the four-month-old withdrawal request, whether the $50 million Scilex deal closes, and how the reworked going concern assessment turns out.