Datavault AI Shares Plunge 50% After Failing to Withdraw Bitcoin From Biconomy

Datavault AI (DVLT) shares fell sharply by nearly 50% in Tuesday's trading (28/10) after official documents revealed that the company has been unable to withdraw bitcoin from the Biconomy exchange since June. The close at US$0.067 on volume of about 244 million shares marked one of the largest sell-offs in the corporate crypto treasury sector this year.

The trouble began with a September 2025 agreement with Scilex Holding Company. Scilex agreed to buy US$150 million worth of Datavault shares and warrants using bitcoin. A total of 1,309.04 BTC was credited to Datavault's account at Biconomy through an off-chain transfer, meaning the balance moved within the exchange's system without a transaction on the Bitcoin blockchain. Datavault then sold 491.4 BTC back to Scilex and received about US$40.5 million in cash.

However, when Datavault requested a withdrawal to an external account in June, the transfer was never completed, up to the filing of documents on Monday (27/10). Biconomy itself was involved as the bitcoin supplier in the investment. Scilex's June financial report stated that it sold US$200 million worth of shares in subsidiary Semnur to Biconomy to obtain bitcoin, then used US$150 million of it to buy Datavault securities.

Datavault now states that the bitcoin credited through the Scilex investment should be recorded as an amount owed by Scilex for the shares purchased, not as the company's own crypto asset. This correction will reduce shareholders' equity and cut total reported assets. Previously, the bitcoin balance was treated as funds that could be withdrawn to finance operations, so the company must revisit its liquidity assessment.

"We are reevaluating our ability to utilize those crypto assets as a source of liquidity," the filing stated, as quoted by CoinDesk.

This case highlights the risks inherent in corporate bitcoin treasury strategies, especially when assets are held on third-party exchanges with off-chain transfer mechanisms. Unlike stablecoins or assets held in custodian wallets, exchange balances depend on the integrity and liquidity of the operator. When a withdrawal fails, the company loses control over assets that were supposed to be a financial buffer.

For Indonesian investors, this event is a reminder that crypto exposure through public companies is not always equivalent to direct ownership. The domestic capital market regulator, OJK, has loosened crypto investment rules, but oversight of entities that hold digital assets on foreign exchanges remains a gap. Financial statement transparency is key before the public puts funds into instruments linked to volatile assets.

Datavault is not the only company facing such problems. Several corporate treasuries have reportedly run into liquidity difficulties when bitcoin's value fluctuates and access to partner exchanges is disrupted. However, the scale of the US$92.2 million correction to the company's assets shows that the impact can be significant for the balance sheet, not merely a decline in investment value.

Going forward, attention will turn to the moves by Biconomy and Scilex. Will Biconomy open communication and complete the withdrawal, or will a broader legal dispute emerge? Meanwhile, Datavault must convince the market that restructuring its financial statements does not jeopardize its going concern. Without clarity on the trapped assets, investor confidence will be hard to restore in the near term.