Bybit Study: 16 Blockchains Have Protocol‑Level Fund Freezing Capabilities

Crypto Freeze Fears: 16 Blockchains Wield Protocol-Level Fund Control The ability to freeze user funds at the protocol level has long been a contentious issue in the decentralized world of cryptocurrency. A new study has revealed that 16 existing blockchain networks possess this capability, sparking concerns about the centralization of power and the vulnerability of investor assets. The report, conducted by researchers at Bybit, examined the technical architectures of over 35 prominent blockchain projects. Their findings highlight a troubling trend – a significant portion of the current crypto landscape allows foundations, governance groups, or other centralized entities to blacklist specific wallet addresses and prevent transactions, effectively freezing user funds. This protocol-level freezing function stands in stark contrast to the core principles of decentralization and user sovereignty that have long defined the cryptocurrency movement. In theory, blockchain technology was meant to empower individuals by removing third-party intermediaries and giving people direct control over their digital assets. The discovery that a sizable number of networks have built-in mechanisms to override this user control has rattled investor confidence and reignited debates around the true nature of blockchain "decentralization." "This revelation is a wake-up call for the crypto community," said industry analyst Samantha Yates. "Many investors were drawn to blockchain projects precisely because they promised censorship-resistance and self-sovereignty. The fact that so many networks can essentially override that at the protocol level is deeply concerning and threatens to undermine the core value proposition of this technology." Beyond the philosophical implications, the ability to freeze funds also raises practical questions around regulatory compliance, asset security, and the overall maturity of the cryptocurrency ecosystem. Governments and financial authorities have long cited the lack of centralized control as a major barrier to mainstream adoption of digital assets. This latest finding could embolden regulators to take a harder stance, potentially imposing stricter rules or even outright bans on certain blockchain networks. "Crypto projects with freezing capabilities are essentially concentrating power in the hands of a few entities, which runs counter to the decentralized ethos," commented blockchain attorney Liam Harrington. "This could invite heightened scrutiny from policymakers who are already wary of the industry's resistance to traditional oversight. Developers will need to grapple with this issue if they hope to achieve true decentralization and win the trust of cautious investors." Looking ahead, the Bybit study suggests that an additional 19 blockchain protocols may also be able to implement freezing functions in the future, further exacerbating these concerns. As the crypto industry continues to evolve, the delicate balance between decentralization and practical functionality will remain a key battleground. Navigating this challenge will be crucial for blockchain projects seeking mainstream adoption and long-term sustainability.