A bitcoin balance on a screen is not the same as bitcoin you can move. Datavault AI (DVLT) learned this publicly. Its shares fell almost 50% on Tuesday after the company said it had been unable to withdraw bitcoin from the Biconomy exchange since June. If you keep crypto on any platform, this story shows a simple test you can run on your own account.
What happened
According to CoinDesk and The Block, the trouble goes back to a September 2025 agreement. Scilex Holding Company agreed to buy $150 million of Datavault shares and warrants, paying in bitcoin. The Block reports the deal covered 15 million common shares and a pre-funded warrant for more than 263.9 million shares. It puts the price at roughly 1,328.43 BTC, at $112,915.52 per coin.
The bitcoin was never sent to Datavault over the Bitcoin network. CoinDesk reports that Scilex credited 1,309.04 BTC to Datavault's account at Biconomy through off-chain transfers. That means the numbers changed inside the exchange's own system, with no transaction on Bitcoin's blockchain.
Datavault later sold part of that balance back to Scilex. CoinDesk says it sold 491.4 BTC for about $40.5 million in cash. The Block says these sales happened between September 2025 and January 2026.
In June 2026, Datavault asked to move bitcoin from the Biconomy wallet to an external account. According to its filing, the withdrawal was still incomplete as of Oct. 26. The Block notes that the filing gave no explanation for why.
What the company said about its books
In a Form 8-K filed with the U.S. Securities and Exchange Commission on Oct. 26, Datavault said more than a year of its financial statements can no longer be relied upon. The Block reports that the company now believes the bitcoin from the Scilex deal did not qualify as a company digital asset. It should have been recorded as a subscription receivable, which is money still owed for shares. That entry reduces shareholders' equity instead of appearing as crypto holdings.
The company had counted those bitcoin balances as a source of cash to keep operating. It is now reassessing whether it can continue as a going concern, and The Block says collecting the amounts from Scilex remains uncertain. Datavault plans to restate its results but has not set a timeline.
On the market side, DVLT closed near $0.067 on Tuesday, down from $0.133 the day before. CoinDesk puts the drop at 49.55%. About 244 million shares traded, which The Block describes as roughly eight times the previous day's volume.
The numbers in one place
The Block lists how much the restatements are expected to cut Datavault's reported total assets at four dates:
| Date | Expected reduction in total assets |
|---|---|
| Sept. 30, 2025 | $8.1 million |
| Dec. 31, 2025 | $92.2 million |
| March 31, 2026 | $57.1 million |
| June 30, 2026 | $49 million |
What we do not know
Neither outlet reports why the withdrawal failed. CoinDesk said Biconomy had not responded to its questions about the withdrawal request or the bitcoin backing Datavault's account. The Block said it had contacted Datavault and Scilex. Without more information, it would be wrong to assume fraud or insolvency at any party. The facts that are established are narrower: a balance was shown, and the owner could not take it out.
What this means for you
You are probably not running a listed company, but the weakness is the same one ordinary holders face. When crypto sits on a platform, what you own is a claim on that platform. Whether the claim is worth anything depends on whether the platform can deliver real coins when you ask.
The off-chain detail matters most. A credit inside an exchange is a bookkeeping entry. It becomes your bitcoin in practice only when a withdrawal reaches an address you control, and that is what failed here.
Here is a practical checklist:
- Run a test withdrawal. Send a small amount to a wallet where you hold the keys, and confirm it arrives. Do this before you need the money, not after.
- Test again after big changes. If a platform changes its terms, adds delays, or you deposit a much larger amount, repeat the test.
- Know who holds the keys. If a company says it holds bitcoin for you, ask whether that means real coins in a wallet it controls or just an internal ledger entry.
- Look at the withdrawal history. Frozen or "pending" withdrawals that last days or weeks are a warning, whatever the reason given.
- Do not rely on a balance screen alone. A number in an app is not proof that the coins are available.
- Keep only what you need on platforms. Money you do not plan to trade soon is usually safer in a wallet you control, as long as you protect your recovery phrase.
- Be wary of "crypto treasury" claims. If you own shares in a company that says it holds bitcoin, check its filings for where the coins are held and whether the company has shown it can withdraw them.
Holding your own keys has risks too. If you lose a recovery phrase or fall for a phishing scam, nobody can restore your coins. The point is to know which risk you are taking, not to treat one option as risk-free.
A warning for share investors
This story also applies to people who gain bitcoin exposure through company stock. A company's reported crypto holdings are only as reliable as its accounting and its custody arrangements. Datavault's case shows how an asset on the balance sheet can later be reclassified as money owed. This is not a view on any share price. It is a reason to read how a company describes where its coins are kept.
FAQ
What is an off-chain transfer in crypto?
It is a transfer recorded inside a company's own system, such as an exchange, without a transaction on the blockchain. CoinDesk says this is how the bitcoin reached Datavault's Biconomy account. Off-chain transfers can be fast and cheap, but your balance is only a record until you withdraw it to a wallet you control.
Why can't some people withdraw crypto from an exchange?
There are many possible reasons, from technical problems to account checks to financial trouble at the platform. In Datavault's case, the filing gave no reason, according to The Block. If your withdrawals stall, contact support in writing and keep records. Do not send more money to the platform while the issue is unresolved.
How can I check that my crypto is really mine?
Move a small amount to a personal wallet and confirm it arrives on the blockchain. If you hold crypto on a platform, treat that balance as a claim on the company. For larger amounts, consider whether you need them on the platform at all.
Sources
- CoinDesk: Bitcoin treasury Datavault AI plunges 50% after firm says it can’t access its BTC
- The Block: Datavault AI stock plummets 50% after firm says it cannot withdraw bitcoin tied to $150 million deal
Photo: Alesia Kozik / Pexels
I'm an Italian creator who builds apps, games and websites. I run Crypto Radar Daily with the help of AI tools: every article starts from the sources linked above, and I check what goes out. I'm not a doctor, a lawyer or a financial adviser. Spotted a mistake or have an idea? Write to me.
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