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Datavault AI Can't Get Its 817 BTC Out of Biconomy, and No Longer Counts Them

NodeWitness Team 8 min read

Datavault AI took $150 million in bitcoin for its shares, and none of it ever reached the company on-chain. The coins were credited to its account at the Biconomy exchange, a withdrawal has been stuck since June, and the company now concedes it can't count them as an asset. It is a clean example of the gap between a balance a platform shows you and bitcoin any node can verify.

In an 8-K filed with the SEC on October 26, Datavault AI (Nasdaq: DVLT) told investors to stop relying on its financial statements for four periods, from the third quarter of 2025 through the second quarter of 2026 [1]. The reason is a bitcoin payment. The stock fell 49.55% on Tuesday, October 27, closing at $0.067, according to CoinDesk [2].

A payment that never touched the chain

In September 2025, Scilex Holding agreed to buy 15 million Datavault shares plus a pre-funded warrant for another 263,914,094 shares for $150 million, payable in bitcoin at $112,915.52 per coin, or about 1,328.43 BTC [1]. On September 26 and November 25, 2025, Scilex credited 1,309.04 BTC to Datavault's wallet at Biconomy "through an off-chain transfer." The missing 19.39 BTC offset cash advances Scilex had already made [1].

An off-chain transfer is not a bitcoin transaction. The exchange simply moves a number from one customer's account to another's in its own ledger [2]. No node ever sees it.

Biconomy was more than the custodian. A Scilex 8-K from September 2025 shows Biconomy bought 12.5 million shares of Scilex's subsidiary Semnur for $200 million, paid in bitcoin into a wallet "maintained by or under the management of Biconomy.com" in Scilex's name [3]. Scilex then used part of that bitcoin to pay Datavault [2]. Between September 26, 2025 and January 30, 2026, Datavault sold 491.431 of those BTC back to Scilex, again off-chain, for about $40.5 million in cash [1].

In June 2026, Datavault requested a withdrawal of bitcoin to an external account. As of the filing, it had not been able to complete it [1]. The 8-K doesn't say how much it tried to move. Subtracting its own figures, the account should show 817.609 BTC if nothing else moved, roughly $66 million at the October 28 price [1][10]. CoinDesk asked Biconomy about the withdrawal and got no reply [2].

Why it is no longer an asset

After reviewing the deal, Datavault concluded the bitcoin "did not meet the requirements for recognition as a digital asset of the Company" [1]. Instead, it will book a subscription receivable, an amount Scilex owes for the shares, shown as a reduction of stockholders' equity. Cash from the 491 BTC sale reduces that receivable [1].

The restatement is expected to cut total assets by $8.1 million as of September 30, 2025, $92.2 million at year-end 2025, $57.1 million as of March 31, 2026 and $49.0 million as of June 30, 2026 [1]. Management is also reassessing its going-concern analysis, since it had counted the bitcoin as a source of liquidity and collecting from Scilex is "uncertain" [1]. Among the risks it lists are its "reliance on a third-party custodian," Scilex's creditworthiness and obtaining "the cooperation of Biconomy" [1]. All figures are preliminary and unaudited [1].

What an exchange balance proves

A balance on an exchange proves the exchange acknowledges a debt to you. Whether real bitcoin backs it, whether there is enough for every customer and whether you get it when you ask are all up to the exchange. Until the coins land at an address whose key their owner controls, the chain knows nothing about them.

The chain keeps a different kind of record. Every bitcoin exists as an unspent transaction output (UTXO) locked to a script, usually an address, and only whoever holds the key can spend it. Every synced node stores the full set. At NodeWitness's most recent count, at block 973,007, our node showed 20,102,919.87 BTC spread across 59,879,495 funded addresses [9]. An internal credit like Datavault's isn't in that set. What is in it are the exchange's own addresses, holding every customer's coins together.

Biconomy reports six bitcoin addresses to CoinMarketCap as its reserves [4]. At block 973,515 they held 1,787.83 BTC between them, with nothing pending [5]. That proves those coins exist and are unspent. It doesn't prove Biconomy holds the keys, since no signature backs the list, and it says nothing about what Biconomy owes. The 817.609 BTC that should sit in Datavault's account come to almost half that total, but without the rest of Biconomy's liabilities, or knowing whether it has other addresses, there is no way to tell whether bitcoin is missing.

Where proof of reserves falls short

Showing coins on-chain is half the job. In 2011, Mt. Gox, then the largest bitcoin exchange, proved its holdings by moving 424,242 BTC to an address announced in advance [6]. Vitalik Buterin cited that episode in 2022 to make the point that the other half is proving how much customers have on deposit [6].

The more complete schemes pair reserve addresses with a proof of liabilities, usually a Merkle tree that lets each customer check their balance was included [6]. Even then, they are a snapshot, and Buterin flags a further problem, the same collateral being pledged against other obligations at the same time [6]. No proof guarantees an exchange will honor a specific withdrawal, which is exactly what Datavault hasn't been able to get.

How to check that bitcoin is yours

The chain only backs a balance when the coins sit at an address whose key you control. From there, verification depends on nobody.

1. Check the output. Your own node, or any synced node, can tell you whether an address has unspent outputs and how much they hold. In Bitcoin Core, scantxoutset searches the UTXO set without the address being in your wallet [8]. A block explorer gives the same answer, but you have to trust whoever runs it, and you tell them which address you care about.

2. Sign a message. To show someone you control an address without moving the coins, sign a piece of text with its key. The legacy format only works for addresses starting with 1, and BIP-322 extends signing to any address type [7]. Let the verifier choose the text and include something recent, such as a block hash, so an old signature can't be recycled.

3. Know the limits. BIP-322 itself warns that no message signature can fully prove control of funds. It is stale the moment it is created, and a keyholder may sign on someone else's behalf [7]. A signature plus an on-chain balance is strong evidence at that moment, not a guarantee for tomorrow.

4. Withdraw to yourself. If you use an exchange, the most direct test is a withdrawal to an address you control. Seeing that transaction confirm on your own node is the step Datavault has been unable to take since June.

For more on reading addresses, outputs and transactions, see what a free bitcoin address lookup can and can't tell you, and for why exchange reserve figures vary so much depending on who labels the wallets, see our exchange reserves analysis. Our free guide, Read the Chain, covers the rest from scratch.

Sources

Source type in parentheses. Web pages accessed on October 28, 2026.

  1. Datavault AI Inc., Form 8-K, Item 4.02, filed October 26, 2026 (also on EDGAR). Scilex agreement, 1,309.04 BTC credited off-chain, 491.431 BTC sale, June withdrawal request, accounting change, asset adjustments, risk factors and affected periods. (Primary, regulatory filing)
  2. Shaurya Malwa, Bitcoin treasury Datavault AI plunges 50% after firm says it can't access its BTC, CoinDesk, October 28, 2026. $0.067 close and 49.55% drop, explanation of internal transfers, origin of the bitcoin and unanswered request to Biconomy. (Secondary, press)
  3. Scilex Holding Company, Form 8-K, filed September 26, 2025, with the Biconomy purchase agreement (Exhibit 10.1) and the press release of September 23, 2025. Sale of 12.5 million Semnur shares to Biconomy for $200 million in bitcoin, paid into a wallet managed by Biconomy.com. (Primary, regulatory filing)
  4. CoinMarketCap, Biconomy.com, reserves section "reported directly by the exchange." Six bitcoin addresses. (Secondary, aggregator with exchange-supplied data)
  5. mempool.space, public address API, queried at block 973,515 for the six addresses in source 4: bc1q3c…3zp4, bc1qz0…4jku, bc1qaa…z3qs, bc1q95…x368, 3QCouZ…2AN5 and 31qd2o…djTP. Combined balance of 1,787.83 BTC. NodeWitness calculation. (Primary, chain data via a block explorer)
  6. Vitalik Buterin, Having a safe CEX: proof of solvency and beyond, November 19, 2022. Mt. Gox's 2011 proof, Merkle-tree proofs of liabilities and collateral dual-use. (Secondary, technical analysis)
  7. Karl-Johan Alm and Oliver Gugger, BIP-322: Generic Signed Message Format. Legacy format limited to P2PKH addresses and warning that no signature fully proves control of funds. (Primary, specification)
  8. Bitcoin Core, scantxoutset, RPC documentation. Searching the UTXO set for outputs. (Primary, official documentation)
  9. NodeWitness, holder distribution, count of our node's UTXO set at block 973,007. 20,102,919.87 BTC across 59,879,495 addresses. (Primary, our own node)
  10. NodeWitness, current price, October 28, 2026, $80,835 per bitcoin from CoinGecko data. (Secondary, price aggregator)

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Last updated: October 28, 2026