On this page · 5 sections ▾
Stolen crypto can be frozen only when a company or group controls the token's rules. Stablecoin issuers such as Tether and Circle can block specific wallets, which locks the tokens in place. Bitcoin and Ether have no such controller, so once they leave a wallet, nobody can stop them from moving.
That difference explains the shape of the Binance theft. As The Next Web reported, about $3 billion was frozen on-chain, while the attacker still held more than 420,000 ETH and 18,270 BTC that no issuer can freeze.
What does freezing actually mean?
Freezing is not recovery. As Tom's Hardware explained, issuers add the thief's wallet to a blacklist in their smart contracts. The tokens stay where they are, but the holder cannot move or exchange them.
Returning the money to its owners is a separate step. Tom's Hardware notes that this usually requires proof of ownership and often long court proceedings.
Why can stablecoins be frozen?
A stablecoin is a token pegged to a currency, such as the dollar. A single company issues it and keeps the code that governs it. That code can include a blacklist function, which the issuer can use on request from investigators or on its own judgment.
In this case, TRM Labs said Tether froze 971.1 million USDT at 21:01 UTC and Circle froze 823 million USDC three minutes later. Ripple, World Liberty Financial and the Arbitrum network's Security Council also froze funds. Speed matters here: the attacker sold about 325 million USDT for ETH at a discount of more than 10% before the freezes spread, according to TRM.
Why can Bitcoin and Ether not be frozen?
Bitcoin and Ether run on networks with no central owner. No company holds a switch to block an address, and transactions are accepted by the network according to its rules. That design is a feature for ordinary users, because no one can lock their savings. It also protects thieves.
Elliptic's Tom Robinson told Wired that the remaining $3.3 billion is mostly Bitcoin, Ether and XRP, which no one can freeze. In his words, it can only be stopped when it reaches an exchange or other service. He does not expect the frozen share to rise much further.
