A new study by Bybit’s Lazarus Security Lab has raised critical questions about blockchain decentralization after revealing that several major networks contain built-in features allowing them to freeze or restrict user assets. The report, titled “Blockchain Freezing Exposed: Examine the Impact of Fund Freezing Ability in Blockchain,” provides an in-depth analysis of over 160 blockchain networks through both AI-assisted tools and manual review.
According to the findings, 16 networks currently include code that enables direct fund freezing, while an additional 19 could potentially integrate similar capabilities with minimal effort. These mechanisms, although designed to address hacking incidents and security breaches, also introduce centralized control elements that contradict the decentralized ideals upon which blockchain technology was founded.
Three Types of Fund Freezing Mechanisms
Bybit’s report classifies the identified freezing mechanisms into three primary categories, based on their design and execution.
The first, hardcoded freezing, is embedded directly into the blockchain protocol itself. This approach allows predefined intervention measures and has been detected in networks such as BNB Chain and VeChain. The second, configuration-based freezing, relies on validator or foundation-managed settings, giving governance entities the ability to enforce restrictions. Networks like Sui and Aptos were noted to employ this model. The third, on-chain contract freezing, operates through system-level smart contracts that can blacklist specific wallets or block particular transactions, as seen in the HECO network.
While these methods provide rapid response capabilities during emergencies, they also centralize authority, potentially undermining the decentralized narrative promoted by blockchain developers.
Real-World Applications of Fund Freezing
Bybit’s researchers identified several real-world incidents where networks had already exercised these freezing powers. Sui reportedly froze around $162 million in stolen assets following the Cetus hack, while Aptos implemented blacklisting functions in response to a related security threat. BNB Chain had also activated hardcoded blacklists to limit the damage caused by a $570 million bridge exploit. Similarly, VeChain froze assets linked to a $6.6 million breach back in 2019.
The report further pointed out that Cosmos, though not yet implementing such measures, could develop comparable features in the future due to its modular account design.
Bybit’s Lazarus Security Lab has released a report revealing that, after reviewing 166 blockchain networks, 16 blockchains were found to have built-in fund freezing capabilities, while another 19 could enable such features with minor protocol changes. The freezing mechanisms… pic.twitter.com/JzmuFcrbpT
— Wu Blockchain (@WuBlockchain) November 12, 2025
To uncover these underlying mechanisms, Lazarus Lab employed an AI-assisted detection system designed to analyze blockchain codebases for blacklisting modules, transaction filters, and administrative controls. Every flagged instance was then reviewed manually to ensure precision and eliminate false positives.
Transparency and Governance Concerns
Bybit emphasized that the existence of these control mechanisms underscores the need for greater transparency across the blockchain sector. The firm noted that users and investors must be informed about whether their chosen networks possess the power to intervene in fund transfers or wallet access.
David Zong, Bybit’s Head of Group Risk Control and Security, explained that while blockchain technology was originally intended to operate under decentralized principles, many networks have incorporated safety mechanisms to mitigate security threats. He stated that transparency remains a key factor in maintaining industry trust and that open governance practices are crucial for the responsible implementation of such powers.
The Lazarus Lab report urged blockchain developers to publicly disclose any built-in fund control features and to establish clear governance frameworks that define how and when these mechanisms can be used. Bybit indicated that greater openness would not only reinforce user confidence but also foster a more accountable blockchain ecosystem.
In conclusion, the study highlights a growing tension between decentralization and security within blockchain networks. While fund freezing capabilities offer critical safeguards against cyber threats, they also raise concerns about centralized intervention and a lack of transparency. Bybit’s findings aim to encourage dialogue within the industry about balancing security needs with the foundational principles of decentralization.
