Crypto “Kill Switch” Exposed: Bybit Reveals 16 Blockchains Can Freeze User Funds
A recent report from Bybit’s Lazarus Security Lab has uncovered a startling fact: 16 blockchain networks have built-in mechanisms that can freeze or restrict user funds, raising questions about the true level of decentralization in these systems. The report, published on Tuesday, analyzed 166 blockchain networks using a combination of AI-driven discovery and manual code review.
Major Blockchains Impacted
Major chains, including Binance-backed BNB Chain, VeChain, Chiliz, Viction, and XinFin’s, have been found to have these control mechanisms in place. Bybit researchers categorized these control mechanisms into three main types: hard-coded freezing, configuration-based freezing, and on-chain contract freezing.
Source: Lazarus Security Lab by Bybit
Freezing Mechanisms
Ten of the 16 blockchains rely on configuration files such as YAML, ENV or TOML to manage private blacklists that are only accessible to validators or foundations. Examples include Aptos, EOS, and Sui, which can freeze funds via validator-level configuration changes.
Source: Lazarus Security Lab by Bybit
Security vs. Decentralization Debate
The findings add fuel to the crypto industry’s ongoing debate over whether blockchains should have the power to intervene in user transactions. Proponents argue that such features are essential to responding to hacks or criminal activity, while critics warn that they undermine the core principles of decentralization and censorship resistance.
Bybit has just confirmed that 16 coins can literally freeze your funds. 3 types of “freezing”: – Hardcoded in the protocol (like $BNB) – Validator/Foundation control (like $SUI, $APT) – On-chain contract execution (like HECO)
Source: Lazarus Security Lab by Bybit
Conclusion
The report refrains from making policy recommendations but urges greater transparency around such functions. “Blockchains that include freezing features should clearly disclose these,” the authors wrote, warning that undisclosed points of intervention could mislead users about how much control they actually have over their funds. For more information, visit the source link: https://cryptonews.com/news/bybit-16-blockchains-kill-switch/
