Crypto asset freezes are no longer a rare event. In recent years, market participants have repeatedly faced situations where stablecoins were frozen at the request of issuers, certain addresses were blocked at the blockchain level, and centralized services tightened checks and compliance requirements under regulatory pressure.
Crypto Freezes: Who Can Block Your Assets and How to Protect Yourself
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A study by Lazarus Security Lab (Bybit) found that nearly 10% of all examined tokens already have built-in mechanisms for freezing funds, and several dozen more could implement such mechanisms without major changes.
For everyday users, this means a risk of temporarily—or permanently—losing access to assets. For businesses, it means the threat of payment disruptions, working-capital issues, and potential delays in settlements.
In this article, we’ll explain who can freeze a crypto account, how different types of freezes work, what risks exist, and what measures can help protect your funds.
What Is a Crypto Freeze and How Does It Work?
Restrictions on crypto funds can happen in different forms and at different levels. The most common scenario is freezing specific coins on a particular address. The owner still controls the wallet, but cannot perform transactions with that specific asset. This approach is used, for example, by stablecoin issuers like USDT and USDC when theft or suspicious transactions are detected.
A stricter scenario is a full address block, where the blockchain restricts any operations involving the wallet. In that case, the user effectively loses access to all funds stored on that address. Similar measures have been used in some networks after major hacks to prevent stolen assets from being moved out.
There are several reasons why such mechanisms appear:
- Fighting fraud. Projects and regulators increasingly need to respond quickly to theft and hacks.
- Asset protection. Blockchain teams may use freezes as a tool to help recover stolen funds.
- Regulatory pressure. Centralized issuers and projects are forced to comply with AML/KYC rules and sanctions requirements.
At the same time, this creates a conflict with one of crypto’s core ideas—decentralization. The technology was originally built on user independence and the impossibility of outside intervention. The emergence of forced freezing mechanisms—especially at the network level—undermines that principle and makes some blockchains closer to centralized systems.
Who Can Freeze Crypto Assets?
Crypto freezes can occur at several levels—from the token issuer to the network itself. Below are the key actors who can restrict access to funds:
- Token issuers (Tether, Circle). Companies that issue stablecoins can freeze individual tokens or balances on a specific address. This is typically done in fraud investigations, suspected money laundering cases, or when dealing with sanctioned wallets.
- Blockchain developers and protocol teams. Some networks (for example, Sui, Aptos, VeChain) have already used blockchain-level freezes. This may happen after hacks or through validator decisions when there is a need to quickly stop the movement of stolen assets.
- Validators and network operators. In some blockchains, validators can updаte address blacklists. This mechanism can be invisible to users and depends on the network’s internal governance and policies.
- Exchanges and custodial services. Centralized platforms can freeze an account, hold assets, request documents, or restrict withdrawals if they detect AML policy violations or suspicious activity.
- Regulators and law enforcement. Through requirements imposed on issuers and exchanges, they can indirectly trigger freezes—especially in sanctions-related cases or criminal investigations.
Which Blockchains Already Have Freezing Features?
The Lazarus research suggests that freezing mechanisms are far more common than many people assume. Some networks already use them in practice, while others can implement them if needed.
Blockchains with built-in freezing mechanisms
In 16 networks, this functionality already exists. Examples mentioned inсlude BNB Chain, VeChain, Sui, Aptos, EOS, Waves, and others. In many cases, these tools appeared after major hacks, when teams introduced freezes to stop stolen funds and return assets to users.
Blockchains where freezes can be added quickly
Another 19 projects have the technical ability to add freezing with minimal changes. If regulatory pressure increases or the number of hacks grows, similar features may appear there as well.
How Freezes Are Implemented
Networks use different models to restrict operations:
- Public model. The list of blocked addresses is hardcoded and visible to everyone. Examples: CHILIZ, BNB Chain, VECHAIN.
- Private model. The blacklist is maintained by validators and updated without public announcements. Examples: APTOS, SUI, WAVES, and others.
- Smart-contract-based freezing. Used in HECO Chain—changes are applied instantly without a network-wide updаte.
Risks for Users and Businesses
Freezing mechanisms can help protect against fraud, but they also create new risks:
- Loss of access to funds. If an entire address is blocked, the owner loses access to all assets stored there—not just a specific token.
- False positives or excessive freezes. Triggers can be mistaken and decisions may be non-transparent. The owner does not always understand why funds became inaccessible.
- Conflict with decentralization principles. When developers or validators gain tools to control third-party assets, the network becomes more centralized and more vulnerable to external interference.
- AML checks and sanctions. Stablecoins are frozen especially often due to strict compliance requirements. Any wallet linked to “risky” addresses can become a target.
How to Reduce the Risk of Crypto Freezes: Practical Tips
You can’t completely eliminate freezes, but you can significantly reduce the chance of problems by building a sound strategy for managing crypto assets.
Use multiple cryptocurrencies and networks
Don’t keep all funds in a single stablecoin or on a single blockchain. Consider spreading assets across USDT, USDC, and other alternatives to reduce dependence on one issuer or one network.
Split funds across multiple wallets
Keeping everything on one address increases risk. A better practice is to use separate wallets for:
- long-term storage;
- operational activity;
- higher-risk transactions.
Run AML checks on incoming funds
This is especially important for businesses. Before accepting a large payment, confirm that the sender address is not associated with money laundering or suspicious activity. This helps reduce the risk of freezes by services and stablecoin issuers.
Use non-custodial wallets
When only the owner controls access to funds, the risk of external account freezes is lower. The private key is held by the user, not on a third-party platform’s servers.
Avoid “mixed” or suspicious assets
If funds passed through mixers, hacked wallets, or high-risk addresses, the chance of a freeze is higher. It’s safer to check incoming transactions via AML scanners or trusted payment services.
Why It Matters to Plan for Freeze Risks in Advance
Crypto freezes are becoming part of the new reality: today, they are no longer a rare exception, but a steady trend spreading across different tokens and blockchains.
That’s why both users and companies should understand how freezing mechanisms work, what risks they create, and what steps help minimize them.
A well-designed storage and payment infrastructure, asset separation, and the use of services with built-in protection tools can reduce losses and help you keep operating even under growing regulatory pressure.