Datavault AI Inc. (NASDAQ: DVLT) announced that the U.S. Patent and Trademark Office has issued a Notice of Allowance for all 24 claims in its patent application covering blockchain-based methods and systems designed to detect and mitigate naked and excessive short selling through tokenized dividend distribution. The allowed claims include technologies for issuing digital dividend tokens on a distributed ledger, reconciling token issuance with reported share positions to identify settlement discrepancies, automating settlement and share recalls, supporting CUSIP reclassification, and providing real-time reporting and audit capabilities.
The company said the intellectual property expands its blockchain and tokenization portfolio while creating potential licensing opportunities for exchanges, transfer agents, broker-dealers, custodians, issuers and digital asset platforms. This development is significant as naked short selling—selling shares that have not been affirmatively determined to exist—has been a persistent concern for market regulators and publicly traded companies. By leveraging blockchain’s immutable ledger and tokenization, the patented technology offers a transparent mechanism to track share ownership and dividend distribution, potentially reducing settlement failures and enhancing market integrity.
For Datavault AI, this patent strengthens its position in the Web3 and fintech landscape. The company’s platform already integrates AI-driven data experiences and asset valuation, and now adds a blockchain layer that could be licensed to key market participants. According to the press release, the patent covers technologies that can automatically recall shares in cases of settlement discrepancies and provide real-time audit capabilities, which could streamline compliance for financial institutions.
The patent also aligns with broader regulatory efforts to curb abusive short selling. The Securities and Exchange Commission has increased scrutiny of settlement practices and short sale transparency. Datavault’s solution could offer a technological avenue for market participants to comply with evolving rules while reducing costs associated with manual reconciliation.
Investors and industry watchers will be monitoring how Datavault AI commercializes this patent. The company’s newsroom at https://ibn.fm/DVLT will provide updates on licensing deals and product integrations. The full press release is available at https://ibn.fm/Ce5bf.
