37-48% drop for Datavault AI after Bitcoin withdrawal issue with Biconomy

The Nasdaq-listed firm Datavault AI (DVLT) has seen its shares decline by over 50% after disclosing that it has been unable to retrieve its Bitcoin (BTC) from the Biconomy exchange for approximately four months.

The company issued an SEC Form 8-K on October 26, 2026, reporting that its request to move the Bitcoin off Biconomy had been pending for four months. Furthermore, Datavault stated that several quarters of its financial statements are no longer reliable. This news triggered a sharp market reaction, with shares falling by roughly 37-48% and trading near $0.07.

The financial predicament stems from a September 2025 equity purchase agreement involving Scilex Holding Co. (NASDAQ: SCLX). Under the terms of this $150 million agreement, 1,309.04 BTC was credited to Datavault's account that month. Subsequently, Datavault sold 491.431 BTC back to Scilex for approximately $40.5 million in cash. The remaining Bitcoin is currently held on Biconomy, and the withdrawal request for this amount has been outstanding for four months as of the filing date.

Following this, Datavault determined that the Bitcoin did not qualify as a digital asset on its books; instead, the firm will categorize it as a subscription receivable. This classification represents a claim on money owed by an investor for shares they agreed to purchase, rather than an asset under the company's full control. This reclassification is anticipated to reduce Datavault's total assets across all affected reporting periods. The projected asset reductions are as follows: $8.1 million lower on September 30, 2025; $92.2 million lower on December 31, 2025; $57.1 million lower on March 31, 2026; and $49.0 million lower on June 30, 2026.

The accounting debate centers on the concept of control; if an entity cannot move an asset, it becomes more difficult to justify its inclusion on the balance sheet as a liquid holding. For the shareholders of DVLT, the immediate worry is the restatement itself, meaning that until revised financials are published, investors lack dependable figures covering about a year of the company's history. The unresolved withdrawal adds another layer of uncertainty, as Datavault has not specified when or if the remaining Bitcoin will become accessible.

The issue is linked to the equity purchase agreement with the other listed company, which could draw scrutiny to how both organizations accounted for the transaction. The company initially received 1,309.04 BTC through the deal with Scilex in 2025. After selling 491.431 BTC back to Scilex, roughly 817.61 BTC remains on the exchange, which, at the current spot price, equates to over $65 million.

Datavault AI, which operates in the realm of data and tokenization technology, also possesses the WiSA wireless audio portfolio, and during the same timeframe as the restatement news, the company announced 13 US patent milestones for that portfolio.

The market reacted on October 27, 2026, the trading day immediately following the disclosure, with reported drops spanning from 37% to 48%, pushing the stock to a low near $0.07.

The failure to withdraw the Bitcoin, compounded by the financial revisions and the locked status of over 817 BTC, suggests the company may face financial difficulties. If the company cannot recover its funds or secure more liquid assets, it could face insolvency, potentially exposing shareholders to further losses. The primary concern for Bitcoin holders relates to the 817 BTC trapped on Biconomy, valued at more than $65 million at $80k per BTC, raising questions about how treasuries manage their Bitcoin and their ability to sell or move it when necessary if resolution is slow.

The logic suggests that the locked coins represent a small fraction of Bitcoin’s total circulating supply, so the immediate effect on BTC’s price might be limited. Nevertheless, the larger issue is Datavault AI’s fiscal standing and how that impacts confidence in the possibility of recovering the coins. The company is under financial duress, presenting a risk of insolvency. Furthermore, Datavault has not clarified the cause of this withdrawal problem, leaving it unknown whether there is a dispute or merely an operational difficulty; there is no indication that the Bitcoin is missing or lost.

The initial announcement of the shares' decline, which was reported on Crypto Briefing, highlighted the dangers associated with illiquid crypto assets, potentially eroding market trust and investor confidence.