Warning! 16 Blockchains can freeze your coins!

[dkbit98]

Important warning to everyone who is using a bunch of coins on different blockchains, many of them can be frozen!
This issue has bee investigated and confirmed by Bybit’s Lazarus Security Lab and some include some major blockchains including BNB chain.

Binance BNB Chain has hardcoded rules that enables them to freeze all your coins, but it's not only binance chain, it's also CHILIZ, VIC, XDC and VECHAIN.
Hardcoded freezing for those chains is built directly into the blockchain code, but there are others that have configuration-based freezing, and others with potential to freeze coins.
Full list is shown in image bellow, but there is a chance that other blockchains have something similar that is not discovered yet.



Source article:
https://www.bybit.com/press/post/bybit-s-lazarus-security-lab-reveals-hidden-fund-freezing-functions-across-16-major-blockchains-blt3ce15bb5dcfaef51

Original PDF document:
https://assets.contentstack.io/v3/assets/bltffdbacf2f22e15fa/bltda1597363a4f2a2b/69144b86424c333a34bc9fa8/2509-T68340_Security_Report_1111.pdf

At this point holding anything in altcoins or stablecoins is a big risk, especially long term.
You should swap that crap to Bitcoin and hold it in your own non-custodial open source wallet.

[Sim_card]

I believe that anyone holding those crap coins know the risk attached to it, because it's more of gambling with your money than investing. Look at the information that you posted, it shows that altcoins is a typical example of fiat in the cryptospace. People should only invest in bitcoin that's beyond human control and store it in your noncustodial wallet for the proper safety of your coins because if you store your bitcoin in an exchange, they can also freeze it.

[BlackBoss_]

At this point holding anything in altcoins or stablecoins is a big risk, especially long term.
You should swap that crap to Bitcoin and hold it in your own non-custodial open source wallet.

It's a long lasting risk existence and years ago, people warned about risk of freeze of stable coin in non custodial wallets.
PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
There is a black list of stable coin addresses.
Stable coins and black lists.
Stablecoin blacklists: How they work and who controls them.

[_act_]

What I will like people to also know is that a blockchain may not have the freezing capability in its hardcore but the token that builds on it may have the capability to freeze people's coin. Examples of this is Tron and Ethereum blockchain which can not freeze people's coins but Tether can freeze USDT while Circle can freeze USDC on any noncustodial wallet. Crypto is getting more complicated and also more centralized as I read this topic to know it is true.

[retaur]

Yeah I'm not sure how well known this is or if it's actually been done. I know some usdc/usdt has been confiscated after tornado cash was sanctioned so there's a risk similar to that there.

Dai seems a pretty safe stablecoin to hold. There are enough decentralised competitors too that you can completely avoid holding usdc/usdt without taking on too much risk.

[albon]

I don't think this can affect regular investors who obtained their coins legally and legitimately.

This freezing and its various mechanisms on these blockchain networks can only occur in the event of a massive hack or large-scale thefts worth millions of dollars. In that case, they can use these freezing mechanisms simply to protect users' assets from being stolen. isn’t that actually a good thing?

Although this contradicts to some extent the principle of decentralization, and many alternative coins has now become like stablecoins , what I see is that what they have developed in these blockchains is an important advantage for facing emerging security threats.

Everyone has their own point of view on this matter. as for me, as an investor, I prefer Bitcoin because it’s the safest asset in the market, and if I invest in other cryptocurrencies, I do so cautiously and with amounts that I can afford to lose. However, I don’t believe there’s any risk of my assets being frozen, as I’m just a regular investor who doesn’t engage in any wrongdoing.

[Alpha Marine]

I don't think this can affect regular investors who obtained their coins legally and legitimately.

This freezing and its various mechanisms on these blockchain networks can only occur in the event of a massive hack or large-scale thefts worth millions of dollars. In that case, they can use these freezing mechanisms simply to protect users' assets from being stolen. isn’t that actually a good thing?

This would have been a good thing in a perfect world. A world where it cannot be exploited and only the bad guys will be punished with it, but we don't live in a perfect world. We live in a world where the government of a country can use it to go after those who are against it. As long as it's there and is controlled by human beings, there is room for exploitation.
In a perfect world, we can allow the government to read our texts, emails and calls as long as they catch bad guys in the process. This might reduce terrorism and crimes to a minimum, but we can't trust human beings with that kind of power because it will always be exploited.
This is what makes it scary. With this freezing mechanism, you're at their mercy. You can be punished before or with no conviction.

[Ambatman]

It happened some months ago where a vulnerability was exploited and the stolen funds were frozen
I think it was Sui.

Binance experienced the same around 2022 https://techcrunch.com/2022/10/07/blockchain-bridge-hack/
As can be seen the BNB froze majority of the funds.

Vetchain experienced same as can be seen here https://www.newsbtc.com/news/how-vechain-cryptocurrency-was-able-to-track-and-freeze-6-1m-of-stolen-funds/

Added Vet because it wasn't added on your list.
Seen it.

In summary, the power of centralization runs deeper than many may think.
Associating it to just a Third party.

[Obim34]

At this point holding anything in altcoins or stablecoins is a big risk, especially long term.
You should swap that crap to Bitcoin and hold it in your own non-custodial open source wallet.

How we've moved from talking about centralized exchanges freezing coins to having blockchain developers doing the freezing and becoming the scarecrow, what else will be used to compare with Bitcoin, even the network as a whole isn't safe to hold coins, there is always a fine line to say no and stick with Bitcoin.

If coins are frozen, how can they be recovered?

[Findingnemo]

~
If coins are frozen, how can they be recovered?

No one can recover it, the team or whoever is in control of that chain has to unfreeze it then only you will have access back to the coin.
I don't see ETH in that list but AFAIK, USDT on ETH network can be frozen then ETH must be added to the list right or am I missing something?

[Stalker22]

If coins are frozen, how can they be recovered?

You cant.  Thats the whole point of a centralized, freeze-capable chain.  I mean, if the authority behind those blockchains decides to lock your funds, you are completely at the mercy of whoever holds the administrative key.

Typically, in such situations, they issue new coins/tokens to replace the frozen ones.  At least thats what they have done in cases of major hacks or thefts.

[dkbit98]

I don't think this can affect regular investors who obtained their coins legally and legitimately.

You live in a dream world.
It doesn't matter how anyone got their coins, and not all coin owners are ''investors'', whatever that means.

You cant.  Thats the whole point of a centralized, freeze-capable chain.  I mean, if the authority behind those blockchains decides to lock your funds, you are completely at the mercy of whoever holds the administrative key.

Exactly.
That is why any of those blockchains listed above (including binance chain) can't be considered decentralized in any way.
I think people are not yet aware of all the dangers that can happen with opening this Pandora Box, and most think that won't happen to them.

Meanwhile, Apple just released their own Digital ID.
It's probably ''nothing''  

[Altryist]

Important warning to everyone who is using a bunch of coins on different blockchains, many of them can be frozen!
This issue has bee investigated and confirmed by Bybit’s Lazarus Security Lab and some include some major blockchains including BNB chain.

Binance BNB Chain has hardcoded rules that enables them to freeze all your coins, but it's not only binance chain, it's also CHILIZ, VIC, XDC and VECHAIN.
Hardcoded freezing for those chains is built directly into the blockchain code, but there are others that have configuration-based freezing, and others with potential to freeze coins.
Full list is shown in image bellow, but there is a chance that other blockchains have something similar that is not discovered yet.



Source article:
https://www.bybit.com/press/post/bybit-s-lazarus-security-lab-reveals-hidden-fund-freezing-functions-across-16-major-blockchains-blt3ce15bb5dcfaef51

Original PDF document:
https://assets.contentstack.io/v3/assets/bltffdbacf2f22e15fa/bltda1597363a4f2a2b/69144b86424c333a34bc9fa8/2509-T68340_Security_Report_1111.pdf

At this point holding anything in altcoins or stablecoins is a big risk, especially long term.
You should swap that crap to Bitcoin and hold it in your own non-custodial open source wallet.

This has been known for a long time, tether can freeze USDT, and it does so, mostly presenting it as a fight against fraud and similar issues, however I think the risks could affect anyone. This is becoming relevant now for those who want to sell their coins and move into stablecoins for a while. If you’re ready to simply hold Bitcoin, then of course that’s the safest option. But if you’re one of those who sell Bitcoin during a bull market to lock in profits and buy back cheaper during a bear market, then you’ll need to convert your coins into stablecoins. The only way to avoid this is by cashing out into fiat.

[Odohu]

I did not read through the article to get all the details but I'm viewing the entire thing from two perspectives. First is on the assumption that those coin freezing abilities were embedded in the codes as a security measure in case of serious breach such as hacks, they can easily freeze those assets and prevent them from being spent; this is a lame reasoning though. The second idea that ran through my head was that those coin freezing abilities were added as a means of control in the form of centralization. I don't know for sure the rational behind it but whatever they might be, Bitcoin saves everyone from the stress and therefore the only recommended asset to hold.

[dkbit98]

This has been known for a long time

This is NOT true.
You should not speak about something you don't understand at all, and you should at least spend a few minutes reading the report I posted.
I am NOT talking only about stablecoins, but about WHOLE blockchains with all their native coins and tokens, this is a huge difference.

PS
People who continue to write silly things will be reported to moderators, so better think before you write something in this topic.
Thank you for your attention.

[Z390]

I believe that anyone holding those crap coins know the risk attached to it, because it's more of gambling with your money than investing. Look at the information that you posted, it shows that altcoins is a typical example of fiat in the cryptospace. People should only invest in bitcoin that's beyond human control and store it in your noncustodial wallet for the proper safety of your coins because if you store your bitcoin in an exchange, they can also freeze it.

The only thing that I can trust a bit on the list is BNb, because so far this exchange token has always grown better than other alternative coins, if you look at the chart it is very good still, those who invested in BnB since 2017 are already big whales and millionaires.
I think the best alt to take risks on are those exchange  tokens, it is hard to see one that isn't doing well, Weex token for example has been surging with good chary movement, same as Bitget token, I guess this is happening because they are liquidity provider or just because they are exchanges where other tokens are been traded.
I don't encourage the frozen ability but something made me remember the past stolen funds on Binance and other exchanges, they are able to recover most of the funds because of the freezing ability, if anyone still cares alot about decentralisation they should go for Bitcoin and avoid these alternatives.

[LoyceV]

I don't think this can affect regular investors who obtained their coins legally and legitimately.

That's quite a big assumption!

Although this contradicts to some extent the principle of decentralization

I dare go a bit stronger than saying "to some extent": those coins are not decentralized at all. They could just as well be running a local database.

what I see is that what they have developed in these blockchains is an important advantage for facing emerging security threats.

They use the word "blockchain" for the hype. If one entity controls it, it's a database.

[Zwei]

I don't think this can affect regular investors who obtained their coins legally and legitimately.

yeah, but who makes that judgment? "they" could twist the facts any time to make your legally and legitimately obtained coins illegal and illegitimate.

This freezing and its various mechanisms on these blockchain networks can only occur in the event of a massive hack or large-scale thefts worth millions of dollars. In that case, they can use these freezing mechanisms simply to protect users' assets from being stolen. isn’t that actually a good thing?

no. these freezing mechanisms are not for the users, they are for the big companies behind those "blockchains", if you, me, or some random dude lose his coins, they will tell us to suck it up.

Although this contradicts to some extent the principle of decentralization, and many alternative coins has now become like stablecoins , what I see is that what they have developed in these blockchains is an important advantage for facing emerging security threats.

they are just reinventing fiat.

Everyone has their own point of view on this matter. as for me, as an investor, I prefer Bitcoin because it’s the safest asset in the market, and if I invest in other cryptocurrencies, I do so cautiously and with amounts that I can afford to lose.

that i agree with.

However, I don’t believe there’s any risk of my assets being frozen, as I’m just a regular investor who doesn’t engage in any wrongdoing.

until you decide to use a centralized service, and they think otherwise.

[khiholangkang]

Thanks for sharing it, I think this is very important to make a note on the record, especially those who are often active in other parts of the blockchain network.

Lately, I am often active in BNB Chain, Vechain and SEI, almost all of my time is spent looking for a speck of profit on several projects and calls from my DAO community, with this information it will certainly be much safer for me not to hold in the long run, especially in bearish markets where there are always many failed and bankrupt projects so that they become scams, reduced liquidity and lose our money, because they cannot be withdrawn.

[promise444c5]

I wonder what they thought Bitcoin was all about since it was the FIRST…Bitcoin shouldn’t even be regarded as crypto because the crypto space itself is full of centralization.

with this information it will certainly be much safer for me not to hold in the long run, especially in bearish markets…

So what do you plan on doing in bull market, hold it?



The only thing that feels safe is not to engage with it that much either short term or long term, Bear or Bull market..
How long you hold it doesn’t change anything, it can be frozen anytime..