Datavault AI shares crash 50% after failed Bitcoin withdrawal

Shares of Datavault AI, a Nasdaq-listed company holding a Bitcoin treasury, suffered a severe decline on October 27, falling 49.55% to close at $0.067. The sharp drop followed a Form 8-K filing with the U.S. Securities and Exchange Commission (SEC) on October 26, in which the company revealed it has been unable to complete a request to withdraw Bitcoin from the exchange Biconomy since June. The disclosure also indicated that four sets of previously issued financial statements can no longer be relied upon, triggering a restatement process that significantly alters the company’s reported balance sheet.

Withdrawal Request Stalled Since June

According to the filing, Datavault requested a transfer of its Bitcoin holdings to an external account in June 2026. As of the filing date, the company stated it was “unable to complete the withdrawal,” though it did not specify the technical or administrative reasons for the delay. The Bitcoin in question originates from a September 2025 agreement with Scilex Holding, a pain-medicine company, which paid $150 million in Bitcoin for 15 million Datavault shares and a pre-funded warrant. The transaction involved approximately 1,328.43 BTC, valued at $112,915.52 per coin at the time. Scilex credited 1,309.04 BTC to Datavault’s Biconomy account, a figure adjusted for prior cash advances. All transfers were conducted off-chain, meaning the assets were recorded on Biconomy’s internal books rather than the Bitcoin blockchain.

Financial Restatement and Asset Reclassification

Following an internal review, Datavault concluded that the Bitcoin associated with the Scilex deal did not meet the accounting requirements for recognition as a digital asset. Consequently, the company will reclassify the transaction as a subscription receivable, reflecting money owed for newly issued stock. This change reduces reported total assets by $8.1 million as of September 30, 2025, and by up to $92.2 million at the end of 2025. The restatement also affects the first and second quarters of 2026, with asset reductions of $57.1 million and $49 million, respectively. Datavault had previously sold 491.431 BTC back to Scilex for approximately $40.5 million in cash, a sum that will now offset the receivable.

Going-Concern Assessment and Market Reaction

Because Datavault had previously counted these Bitcoin balances as a source of liquidity, management is now reassessing the company’s ability to continue as a going concern. The filing notes that the collection of amounts owed by Scilex is uncertain, citing risks related to Scilex’s creditworthiness and reliance on a third-party custodian. In the market, investors reacted sharply to the news, with trading volume surging to around 244 million shares compared to 30 million in the previous session. While the stock closed at $0.067, it traded as low as $0.060 during the session. The company has not yet specified when the restated financial statements will be filed, warning that delays could impact its upcoming quarterly report.