Investors sent shares of Datavault AI into a freefall on Tuesday, wiping out nearly half of the company’s market value after a stunning disclosure revealed the firm cannot access its own bitcoin holdings. The stock plummeted roughly 50 percent to close at six cents per share following a regulatory filing that admitted the company has been unable to withdraw funds from the Biconomy exchange since June. This operational failure has forced the company to admit that its previous financial reporting was inaccurate and will require immediate restatement.
The crisis stems from a complex series of deals involving Scilex Holding Company, which invested 150 million dollars in Datavault shares and warrants using bitcoin. Rather than moving coins across the public blockchain, the transaction occurred via off chain transfers within Biconomy, essentially updating numbers on a ledger without shifting actual digital assets between wallets. While Datavault managed to sell some of these credits back to Scilex for cash early on, they hit a wall in June when attempting to move remaining funds to an external account.
This technical impasse has created a massive hole in Datavault’s balance sheet. Because the bitcoin remains inaccessible, the company now acknowledges that these assets should have been recorded as debts owed by Scilex rather than liquid holdings. As a result, reported assets are expected to be slashed by over 92 million dollars for late 2025 and another 49 million dollars for mid 2026. For a company that viewed this cryptocurrency as its primary lifeline for sustaining daily operations, the revelation is catastrophic.
As traders scrambled to exit their positions with millions of shares changing hands, Biconomy remained silent regarding why the withdrawals were blocked or where the underlying bitcoin actually resides. The situation highlights the precarious nature of relying on centralized exchanges for corporate treasuries, especially when traditional blockchain verification is bypassed in favor of internal accounting tricks. For now, Datavault AI is left staring at a diminished valuation and an uncertain future while its capital remains locked away.
