Wallet Freeze

A wallet freeze is a restriction that prevents a wallet's balance from being spent, transferred or withdrawn, either in full or in part. Wallet providers, e-money firms and crypto exchanges freeze wallets when they suspect fraud or account takeover, when a customer fails identity checks, when wallet screening or sanctions screening produces a match, or when a court or law enforcement agency orders funds to be held. A firm that files a suspicious activity report may also need to delay or block a transaction. The legal effect is similar to a frozen account at a bank. For sanctions, assets must stay frozen until the authority grants a licence or the person is removed from the list. Some stablecoin issuers can also freeze tokens directly at the contract level, blocking an address on the blockchain itself, a power discussed under stablecoin freezing. Customers are not always told the reason, because tipping-off rules can forbid disclosing an investigation.