A new report by Bybit's Lazarus Security Lab has revealed that 16 major blockchains include code that allows them to freeze or restrict user funds. This finding is detailed in a comprehensive analysis examining how blockchains can intervene in user transactions to mitigate security incidents such as hacks and exploits.
The report, titled "Blockchain Freezing Exposed: Examine The Impact of Fund Freezing Ability in Blockchain," represents the first large-scale investigation into this critical aspect of blockchain functionality. Researchers utilized an AI-driven analysis combined with manual review to examine 166 blockchain networks. Their findings indicate that while 16 chains currently possess fund-freezing capabilities, an additional 19 could implement such features with relatively minor protocol adjustments.
Types of Fund-Freezing Mechanisms Identified
The study categorizes fund-freezing mechanisms into three distinct types:
- •Hardcoded freezing: This mechanism is integrated directly into the blockchain's core code. Examples include BNB Chain and VeChain.
- •Configuration-based freezing: This type is managed through settings controlled by validators or a governing foundation. Sui and Aptos are cited as examples.
- •On-chain contract freezing: This is executed via system contracts deployed on the blockchain. HECO is mentioned as an instance of this mechanism.
Notable Cases of Fund Freezing
The report highlights several significant instances where fund-freezing functions have been employed:
- •Sui successfully froze $162 million in stolen assets following the Cetus hack.
- •Aptos implemented blacklisting functions after experiencing a security incident.
- •BNB Chain utilized hardcoded blacklists to contain a bridge exploit valued at $570 million.
- •VeChain established an early precedent in 2019 by freezing funds from a $6.6 million breach.
- •Cosmos's modular account design presents the potential for similar interventions in the future.
These interventions underscore the utility of fund-freezing functions as emergency measures designed to safeguard users and reduce damage during large-scale security breaches.
Industry Perspective on Transparency and Governance
"Blockchain was built on the principle of decentralization — yet our research shows that many networks are developing pragmatic safety mechanisms to respond quickly to threats," said David Zong, Head of Group Risk Control and Security at Bybit. "At Bybit, we believe transparency builds trust. Our goal is to encourage open dialogue and better governance across the industry."
To facilitate this research, Bybit's Lazarus Security Lab developed an AI-assisted detection framework. This framework was used to scan codebases for modules capable of blacklisting, filtering transactions, or enabling dynamic configuration updates. Human researchers then meticulously validated each identified case to ensure its accuracy.
The study concludes by emphasizing that transparency regarding emergency intervention mechanisms should be a fundamental aspect of blockchain governance. It strongly encourages projects to publicly disclose whether and how they possess the capability to intervene in on-chain activities.
"As crypto matures, clear and transparent safety mechanisms will help build lasting trust among users and institutions," the study concludes.
Research Availability
The full research paper, "Blockchain Freezing Exposed: Examining the Impact of Fund Freezing Ability in Blockchain," is accessible for review.