Datavault AI Inc. (NASDAQ: DVLT) announced that the U.S. Patent and Trademark Office (USPTO) has issued a Notice of Allowance for all 24 claims in its patent application covering blockchain-based methods and systems to detect and mitigate naked and excessive short selling. The patent focuses on tokenized dividend distribution, a technology that could transform how settlement discrepancies are identified and resolved in securities markets.
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. These innovations aim to address the long-standing market issue of naked short selling, where sellers fail to deliver shares, potentially distorting market prices and undermining investor confidence.
According to the company, 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. By enabling real-time tracking of dividend distributions and share positions, the technology could provide market participants with greater transparency and reduce settlement failures.
The patent allowance comes at a time when regulators and market participants are increasingly scrutinizing short-selling practices. The ability to link dividend distribution to actual share ownership via blockchain could offer a verifiable mechanism to ensure that only legitimate shareholders receive dividends, potentially deterring abusive short selling. This could have significant implications for market integrity, as naked short selling has been linked to artificial price suppression and increased volatility.
For investors, the patent could open new revenue streams for Datavault AI through licensing fees. The company’s technology suite, which includes Acoustic Sciences and Data Sciences divisions, already serves industries such as sports & entertainment, fintech, and healthcare. The addition of blockchain-based anti-short-selling tools could further differentiate its offerings in the Web3 and digital asset space.
Datavault AI’s cloud-based platform provides AI-driven data experiences, valuation, and monetization of assets in the Web 3.0 environment. Its Information Data Exchange enables Digital Twins and the licensing of name, image, and likeness by securely attaching physical real-world objects to immutable metadata. The company is headquartered in Philadelphia, PA.
For more details on the patent, visit https://ibn.fm/Ce5bf. For the latest news on Datavault AI, see https://ibn.fm/DVLT.
