Datavault AI Stock Crashes 50% After Company Discloses It Cannot Access Bitcoin Held on Biconomy for Four Months

Datavault AI (NASDAQ: DVLT) shares collapsed nearly 50%, closing at $0.067 on roughly 244 million shares traded on October 27, after the company revealed it has been unable to withdraw its Bitcoin from the Biconomy exchange since June. The frozen holdings are tied to a $150 million investment agreement with Scilex Holding Company, through which 1,309.04 BTC were transferred via Biconomy. Sources differ slightly on how much remains inaccessible, citing figures of either 817 BTC, worth approximately $65 million, or the full transferred amount.

The access failure has triggered a major accounting restatement. Datavault AI said it will restate four financial reports, and estimated that its assets as of December 31, 2025, could fall by $92.2 million as a result of the Bitcoin being unreachable. The episode raises the classic custodial risk flagged by Bitcoin advocates: coins held on a third-party exchange rather than under a company's direct control can become inaccessible.

Maxim Group downgraded DVLT to Hold from Buy on October 28 in the wake of the disclosure. The crash serves as a warning to the growing number of small-cap companies building Bitcoin treasury strategies through custodial arrangements rather than self-custody.