Datavault AI Restates Accounts as Bitcoin Access Fails
Datavault AI (DVLT) shares plunged 49.6% to about $0.067 on October 27, as trading volume climbed to nearly 250 million shares—around eight times the previous session. The sell-off followed an October 26 SEC filing that disclosed accounting errors and a Bitcoin custody issue.
Datavault AI said Bitcoin received in a $150 million 2025 share transaction with Scilex Holding should not have been recognized as a company digital asset. It will restate four reporting periods, reclassifying the amount as a subscription receivable and a deduction from shareholders’ equity. The restatements are expected to reduce reported total assets by $8.1 million to $92.2 million across the affected dates.
Company records show that 1,309.04 BTC was transferred to its account. After Datavault AI sold 491.431 BTC back to Scilex for about $40.5 million, roughly 817.609 BTC remained. The company has been unable to withdraw the Bitcoin held through third-party platform Biconomy since seeking a transfer in June 2026. It has not confirmed that the funds were lost or misappropriated, and the filing did not establish why the withdrawal has failed.
Datavault AI is reassessing its ability to continue as a going concern and warned of potential filing delays, financing needs, financial-control weaknesses and Nasdaq compliance risks. Recovery of the Bitcoin or collection of the receivable from Scilex remains uncertain. For crypto traders, the disclosure highlights custody and counterparty risks, but the immediate market reaction was concentrated in DVLT shares rather than Bitcoin. Traders will be watching the restatement timetable, the next quarterly filing and whether the Bitcoin is released or Scilex repays the receivable.
Neutral
The disclosure is negative for confidence in Datavault AI’s reporting and custody arrangements, but it does not indicate a broad Bitcoin protocol or market disruption. The share-price plunge and unusually high volume reflect company-specific equity risk, not direct selling pressure on BTC. In the short term, the news could weigh modestly on sentiment toward Bitcoin custody and counterparty reliability, particularly among traders assessing exposure to centralized platforms. However, the summaries provide no evidence of forced Bitcoin sales or a material change in BTC supply. Over the longer term, any impact on Bitcoin’s price is likely to depend on whether the funds are recovered and whether further custody failures emerge; those outcomes are uncertain and relate primarily to this company. Broader market liquidity, demand and macroeconomic conditions are likely to remain more important BTC price drivers, so the expected direct impact is neutral.