A report published by the Bybit Lazarus Security Lab team revealed that 16 crypto networks contain features in their code that allow them to freeze or restrict user funds.
The study is titled “Blockchain Freeze Revealed: Exploring the Impact of the Ability to Freeze Funds on the Blockchain.” Analyzing 166 cryptocurrency networks Through a combination of artificial intelligence (AI) tools and manual reviews.
In addition to these 16, there may be 19 more networks, according to the researchers. Introducing similar functionality by making small changes to the protocolThis indicates that the ability to intervene in transactions is more widespread than previously thought.
The report categorizes three main mechanisms for freezing funds:
- coded logic (hardcoded freeze): The ability to freeze funds is written directly into the source code of protocols such as BNB Chain and VeChain.
- Control per configuration file (Configuration-based freeze): Blocking ability depends on parameters defined by the validator or foundation that manages the network, like Sui or Aptos.
- Freeze due to on-chain contract (Freezing on-chain contracts): Freezing is carried out through smart contracts, which are automated tools that can execute blocking instructions from the network itself, like the HECO network.
The Bybit Lazarus Security Lab report details which networks have incorporated or are likely to incorporate these fund freezing mechanisms, as shown in the image below.
According to our analysis, the 16 companies include BNB Chain, Linea, Sui, Aptos, VeChain, XDC, CHILIZ, VIC, EOS, WAXP, and HECO.
Nineteen other additional networks, including Arbitrum, Cosmos, Celestia, Manta, and OKB, can enable similar mechanisms with only minor protocol changes.
Cases where freezing was applied
The report cites several precedents. In 2019, VeChain froze funds related to the theft of $6.6 million.
In 2022, the BNB chain will use a built-in blacklist to $570 million bridge attack leaks funds.
In the Solana ecosystem, Sui Stopped $162 million stolen During the attack on the Cetus protocol, Aptos subsequently introduced blocking and blacklisting capabilities for similar cases.
According to the document, these tools will act as an “emergency mechanism” and Contain hacks and protect users.
However, it has also become clear that there is a central control that contradicts the original idea of these networks. Immutable system with no intermediaries.
David Zong, Head of Risk and Security at Bybit, said:
Although blockchain was built on the principle of decentralization, many networks have developed practical security mechanisms to quickly respond to threats.
David Zong, Head of Risk and Security at Bybit, said:
Transparency and governance in discussions
The study pointed out that it was developed by the security team of the Bybit exchange. Automatic system for detecting code modules This allows for “blacklist” functionality, transaction filtering, or configuration updates.
Results were then manually verified to ensure accuracy.
In their conclusion, the researchers argue that transparency over the ability to intervene should be a central pillar of governance in blockchain.
Additionally, they encourage projects to: Clearly disclose whether the network can freeze fundsand in what circumstances.
“The future of the cryptocurrency ecosystem depends on trust (…) As the space matures, having transparent security mechanisms will help build trust between users and institutions,” the report shows.
The Bybit report therefore opens up an important debate about whether a network that retains the ability to intervene with users’ funds can be truly decentralized.
The answer could redefine how sovereignty and security are understood in the world of cryptocurrencies.