Bybit Report Reveals Shocking Fund-Freezing Capabilities in Major Blockchains

Decentralization myth busted? A bombshell Bybit exposé uncovers built-in 'kill switches' across top-tier chains.

Hidden in plain sight: How validator cartels and DAOs hold ultimate authority to freeze assets—no matter what the whitepaper says.

When push comes to shove, your 'unstoppable' crypto might just... stop. A sobering reminder that code is law—until humans rewrite it.

Bonus jab: At least your frozen funds will be safe from those pesky 20% APY DeFi yields.

• 16 blockchains were found to possess built-in fund-freezing features, while 19 others could enable them with slight adjustments.
• Bybit’s Lazarus Security Lab urges transparency in revealing blockchain intervention mechanisms.
• The report highlights the tension between decentralization and security intervention within blockchain ecosystems.

A comprehensive new study by Bybit’s Lazarus Security Lab has brought to light that a significant portion of blockchain networks possess built-in or easily adaptable fund-freezing mechanisms. 

The report, titled “Blockchain Freezing Exposed: Examine the Impact of Fund Freezing Ability in Blockchain,” analyzed 166 blockchain networks and identified that 16 currently have active freezing functions, while another 19 could enable them with minor code modifications.

The investigation, conducted using an AI-assisted code analysis framework paired with manual validation, represents the first large-scale review of blockchain-level interventions. Researchers categorized these mechanisms into three types, hardcoded logic, configuration-based control, and on-chain contract execution. 

Notable examples include BNB Chain, VeChain, Sui, Aptos, and HECO, each using distinct technical pathways to restrict or recover compromised assets.

Blockchain Decentralization Under Renewed Scrutiny

The findings reignite debate about blockchain’s foundational principle of decentralization. While fund-freezing abilities serve as critical safety tools against hacks and exploits, they also introduce elements of centralized oversight.

In several highlighted cases, these tools were deployed in response to large-scale security incidents. Sui intervened to freeze $162 million following the Cetus hack, while Aptos later integrated blacklisting features to strengthen its response capacity. BNB Chain used hardcoded blacklists to mitigate losses from a $570 million bridge exploit, and VeChain set an early precedent in 2019 by halting stolen assets worth $6.6 million.

The study also notes that the Cosmos ecosystem’s modular account design could allow similar functionalities in the near future, suggesting that controllable fund mechanisms may become increasingly common as blockchain infrastructures evolve.

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Governance Frameworks Vital for Blockchain Integrity

David Zong, Head of Group Risk Control and Security at Bybit, emphasized the importance of transparency, stating, “Blockchain was built on decentralization, yet our research shows networks are adopting pragmatic tools for threat response. Transparency builds trust, and open dialogue is essential for responsible governance.”

The report concludes that fund-freezing features, while necessary for rapid emergency responses, must be clearly documented and publicly disclosed. Bybit’s researchers urge blockchain projects to integrate transparent governance frameworks, ensuring users understand when and how such interventions can occur.

As the cryptocurrency industry matures, the study suggests that balancing security resilience with decentralization principles will be crucial for maintaining long-term trust among users and institutional participants alike.

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