Not your keys - Not your coins = Treasury edition Datavault AI

[bitbollo]

It seems that one of a treasury company [Datavault AI DVLT] that has hosted btc in a exchange ... and since June 2026 they can't be able to withdraw btc! 
Stocks collapsed by 50% - with a reported loss over 90 millions usd from their balance.
https://www.coindesk.com/markets/2026/10/28/bitcoin-treasury-datavault-ai-plunges-50-after-firm-says-it-can-t-access-its-btc
Here is the full story from coindesk.

For what I am aware, this should be the first case of something similar with a quoted company!
The "custody with a third party" isn't also useless but unconvenient - or probably the business model has not been refined. An impressive naive error considering the amount involved...

[Don Pedro Dinero]

It is a small company. Its market capitalisation is just $65M (or $130 before yesterday’s fall). MSTR for example has a 60 billion market cap, in other words, a thousand times greater. I very much doubt that large companies using Coinbase or Fidelity Custody will encounter these problems. It makes more sense for a company to use a custodian than for an individual. Their assets are held separately by a specialist organisation, which is insured, and these companies do not use the bitcoin P2P.

[rbynxx]

The question I have in mind is how thorough are they or the one that is responsible for this to verify that the BTC was actually accessible before treating it as a treasury asset? I don't know who's really at fault here but I think we need to hear first the side of Biconomy that as per the article it didn't respond yet.

It is a small company. Its market capitalisation is just $65M (or $130 before yesterday’s fall).

I don't think market cap or being a small company is an excuse here. We're talking about a company that manages assets that may affect their shareholders if something bad happens. Companies like them should even have less room for mistakes because it will be costly if it happens and that drop will probably take a toll on them.

[Lontor]

Biconomy is the only one with the right to come out in the open and talk their part about what really happened and how they want to handle this loss from here out, is this a loss yet we can't say because they only can't withdraw yet.

Is there no way that treasury company can handle their bitcoin without having to move them to a centralised exchange? Trying to figure something out here, what am I missing?

Treasure companies should be holding using Multisig wallets and when it comes to trading it shouldn't take time, the chances of getting stucked like this will be lower.

[Catenaccio]

It seems that one of a treasury company [Datavault AI DVLT] that has hosted btc in a exchange ... and since June 2026 they can't be able to withdraw btc! 

For what I am aware, this should be the first case of something similar with a quoted company!
The "custody with a third party" isn't also useless but unconvenient - or probably the business model has not been refined. An impressive naive error considering the amount involved...

They can not be their self custodian, and they can sign contracts with professional custodians like Coinbase to store bitcoin for them. It's safer and it's different than simply create a business account, fund it and store the fund there. It's very risky, and it's not a same practice chosen by Bitcoin Spot ETFs with Coinbase is a most favorite custodian for Bitcoin Spot ETFs' Bitcoin treasury.

It is a small company. Its market capitalisation is just $65M (or $130 before yesterday’s fall).

It's small company but its bad practice and loss as a consequence are like valuable lessons for other companies and for individual Bitcoin investors too. Not your keys, not your coins, and centralized platforms are never where you can get keys.

[ABCbits]

The company Datavault AI is rather patient. It's been 4 months since the issue happened, but based on the news, they only fill 8-K form which is about important update/announcement. I wonder when will they decide to take more serious legal action.

[Alvin_talk]

If you check the poor ratings they received from users in trust pilot between 2023 and 2025 you will see that the comments the reviewers leave are very similar to the case at hand. Here is one of the comments:

Fake and cheater exchange. They allow you to deposit and block your withdrawals and trading if you start earning profit. Their so called risk control team comes in the picture and freeze your account.

Request to all to pls stay away from them and file a legal complaint against the exchange.

In my view, the management of Devault_ai$DVLT failed their customers by suscribing to the wrong exchange. There are more reputable exchanges out there to collaborate with and they failed to DYOR. Let's hope the issue gets resolved but I doubt it will, considering they've done something similar in the past.

[mirakal]

For that to drop that low, it only means one thing, probably investors believe the funds will no longer be recovered. However since Biconomy is a licensed exchange, then surely they have some assets to pay their users, or maybe it's just a delay and they will still pay, or maybe it's part of a plan to make the price drop so some can buy cheap? We don't know, but the SEC has to investigate this, because if this turns out to be a scam, this would be the first time I've heard of a custodial exchange scam in the last 3 years.

[Amphenomenon]

The company Datavault AI is rather patient. It's been 4 months since the issue happened, but based on the news, they only fill 8-K form which is about important update/announcement. I wonder when will they decide to take more serious legal action.

I wonder what level of trust they were/are having with such exchange from the fact that every bitcoin transaction they have agreed on between parties have been carried out through this exchange and none thought it would have been right to verify this.

I don't expect businesses to have such trust on exchanges in this current time, also I feel that they were trying to make this private for too long because how well it will tell on their stock we have seen and now every legal actions should be expected.

[Somegory]

There will always be loads of people who believes that their coins are safer on crypto exchanges, don't even try to confuse them because they can't live with themselves losing the coins and having no one to blame.

There will always be loads of people who believes that self custody is still the best even though many hardware wallets got attacked this year alone and most of these attacks are about data theft and leaks.

This is interesting, there is no 100% safety protocol in crypto space currently and to be honest there should be, it's scary reading online that people lose their coins even though they have never connected the wallet to anything before.

2026 is definitely going to leave behind a big mark in this industry.

[_act_]

Treasure companies should be holding using Multisig wallets and when it comes to trading it shouldn't take time, the chances of getting stucked like this will be lower.

Some of the treasury companies are using good exchanges like Coinbase and Binance which are the most common. I do not know the reason a treasury company will leave such exchanges and go for Biconomycom or what it is called.

If a treasury company is holding the coins itself, know that it is still also very risky also. This is different from individuals that hackers are not really targeting like those that have huge amount of coins.

But going for multisig and cold wallet together will make the coins more secure.

[ObeyKnock]

The question I have in mind is how thorough are they or the one that is responsible for this to verify that the BTC was actually accessible before treating it as a treasury asset?

It depends on what defines verification. The BTC was never sent to blockchain (according to coindesk). It was simply credit of 1,309 BTC to a Datavault account inside Biconomy off-chain by Scilex. There was no on-chain transaction and therefore the only way to verify would be to attempt a withdrawal. They have been unable to do this since June.

[Nathrixxx]

It seems that one of a treasury company [Datavault AI DVLT] that has hosted btc in a exchange ... and since June 2026 they can't be able to withdraw btc! 

I am only hearing the exchange name for the first time; that's been said. I don't expect a platform like that to hold their assets on an exchange when they should have held them in cold storage.

Lastly, I also see their kind of behavior in this regard as not being professional enough, they would have diversified their assets than holding it on a single platform that is centralized, this bring about asking, if they are trading with users' funds on that exchange?

[joniboini]

It was simply credit of 1,309 BTC to a Datavault account inside Biconomy off-chain by Scilex.

Based on the article that I've read, they agreed selling their shares for Bitcoin but have never actually received the coins, which kinda sounds unbelieve. So Datavault just take their word for it and sent the money to this, I don't know, guarantor/buyer? I can't understand the reasoning behind this. Even if they assume the other party is trusted and can prove their claims with action, trusting that much money to an off-chain settlement sounds risky, especially if the third-party in question is also questionable.

[Hatchy]

The question I have in mind is how thorough are they or the one that is responsible for this to verify that the BTC was actually accessible before treating it as a treasury asset? I don't know who's really at fault here but I think we need to hear first the side of Biconomy that as per the article it didn't respond yet.

It is a small company. Its market capitalisation is just $65M (or $130 before yesterday’s fall).

I don't think market cap or being a small company is an excuse here. We're talking about a company that manages assets that may affect their shareholders if something bad happens. Companies like them should even have less room for mistakes because it will be costly if it happens and that drop will probably take a toll on them.

Exactly. Whether the market cap is large or small, it shouldn't be an excuse for them not to provide a valid reason for their failure. The exchange holding their coins should also give a proper explanation. Otherwise, it's time they consider taking legal action, because it doesn't make sense that they haven't done so in the past few months since their withdrawals were blocked.Honestly, I don't really have much sympathy for the investors because they already knew the risks of investing through a third party instead of buying and holding Bitcoin themselves. Self-custody will always be the best option, even if centralized platforms seem to be dominating the market in this case.

[pooya87]

"Just crashed"? What is going on here then? That's since 2018

[Hazink]

Biconomy is the only one with the right to come out in the open and talk their part about what really happened and how they want to handle this loss from here out, is this a loss yet we can't say because they only can't withdraw yet.

Biconomy, serving as their custodian service only owes the explanation to why they have not released the bitcoin held for Datavault, which has caused the company so much loss. Even if the bitcoin was not lost, their stock will suffered heavily.

Is there no way that treasury company can handle their bitcoin without having to move them to a centralised exchange? Trying to figure something out here, what am I missing?

The only thing I could think of is asset protection, which they are supposed to use by companies which have the capacity to cover the loss in case anything happens, like some settlement for Coinbase Prime and Binance. Aside from that, maybe that move follows part of a legal agreement for companies.

Treasure companies should be holding using Multisig wallets and when it comes to trading it shouldn't take time, the chances of getting stucked like this will be lower.

Other institutions are using the same medium. Maybe things will change because of this biconomy and data vault issue. Companies which are focused on other things won't want to also handle the security of their holdings' asset, multisig requires the company to choose who they are going to trust with that responsibility.

[Ambatman]

Well I expected something like this happening with most treasury company using custodians
Especially ones not using reputable.
If I'm not mistaken, it would have been better if a maybe 2 of 3 multisig was used.
If they believe the risk of them holding it themselves is too much.

"Just crashed"? What is going on here then? That's since 2018

They have been falling for years as a result of reverse split and issuing of shares without creating value
But this time they went more than 50% in a day after the news.

[EL MOHA]

If I'm not mistaken, it would have been better if a maybe 2 of 3 multisig was used.
If they believe the risk of them holding it themselves is too much.

I do think that going forward this will most likely be the option most of this company’s will be taking. Probably a 2-of-3 multi sig wallet where one key is with the Treasury company, one key in custody of the company’s choosen custodian and then the last one can be with any independent institutional Keyholders which are usually what most lending companies even uses now. It can also be a 3-of-5 multi sig too with many other key holder companies holding the other pair of keys.

Although this doesn’t eliminate the risk that the treasury companies are looking to avoid which is hacking, because even multi sig wallets can be hacked through phishing attack as we have seen with bybit exchange hack.

This post also remind us that the best bank will be us and not any treasury company

[Cookdata]

The question I have in mind is how thorough are they or the one that is responsible for this to verify that the BTC was actually accessible before treating it as a treasury asset? I don't know who's really at fault here but I think we need to hear first the side of Biconomy that as per the article it didn't respond yet.

Biconomy has some questions to answer. What I don't understand is why a company this big takes time to make some investigations. This is my first time of hearing this name, thought it was coinomi at first. A company with millions worth of shares can't even use a reputable custody like coinbase (oops, just heard the parent exchange lost some users data) and some that are long in the game. Datavault is just been silly for trusting this kind of custody. Everything about this Treasury is risk and epic fooling.

Since May this year, almost all the Bitcoin ecosystem are tested, from hardware wallet companies, centralized exchanges, treasury custody. I hope Saylor is checking their treasury, it wouldn't be funny.

It is a small company. Its market capitalisation is just $65M (or $130 before yesterday’s fall).

I don't think market cap or being a small company is an excuse here. We're talking about a company that manages assets that may affect their shareholders if something bad happens. Companies like them should even have less room for mistakes because it will be costly if it happens and that drop will probably take a toll on them.

This is not a mistake, this is negligence and laziness to keep private keys. What treasury custody are doing isn't a rocket science, they keep private key safe and that is it. Datavault could have done this and this will not be public. They think using internal transaction could give them some privacy, I guess they have one now and it's has blown the company.