In a report by Bybit’s Lazarus Security Lab, it was revealed that 16 major blockchains include code that freezes funds.
By Godfrey Benjamin
Editor Julia Sakovich
Updated
2 mins read
Bybit’s Lazarus Security Lab has released a report showing that major blockchains include code that allows them to freeze or restrict user funds. In the report titled “Blockchain Freezing Exposed: Examine The Impact of Fund Freezing Ability in Blockchain,” this approach was highlighted as a strategy that can protect users and mitigate damage in large-scale security breaches.
On the other hand, Bybit says it is against the decentralization principle of blockchain.
According to a recent report from Bybit’s Lazarus Security Lab, around 16 major blockchains have codes that allow them to freeze or restrict user funds. It was tagged the first large-scale analysis showing how blockchains can quickly act in user transactions to contain security incidents such as hacks and exploits.
While this may seem like a good idea, Bybit does not appreciate its defiance of decentralization, which is at the core of blockchain.
Speaking of the development, Bybit’s Head of Group Risk Control and Security, David Zong, noted that “Blockchain was built on the principle of decentralization — yet our research shows that many networks are developing pragmatic safety mechanisms to respond quickly to threats.”
Furthermore, he seized the opportunity to highlight Bybit’s stance on the matter. “At Bybit, we believe transparency builds trust. Our goal is to encourage open dialogue and better governance across the industry.”
Even though users’ protection is important, the crypto exchange stated that transparency around emergency intervention mechanisms should become a core pillar of blockchain governance.
To arrive at the data, about 166 blockchain networks were analyzed using AI-driven methods, along with manual review. The findings were that 16 chains currently have freezing functions. There is another 19, which may introduce the same strategy with relatively minor protocol changes.
One of the freezing mechanisms that is already being utilized is hardcoded freezing, which is built directly into the blockchain code.
According to the report, BNB Chain and VeChain currently use this code to restrict user funds. There is also the configuration-based freezing, which is managed through validator or foundation settings. Sui blockchain utilized this mechanism after the Cetus hack that cost it $220 million in losses.
Last on the list is on-chain contract freezing, which is executed via system contracts.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
