Analysis · United States
Your Crypto Is Frozen. Find Out Why Before You File Anything
Somewhere this month, a compliance officer is preparing a report to the U.S. Department of the Treasury’s Office of Foreign Assets Control ("OFAC") that lists your frozen tokens—or perhaps no one is preparing such a report because your tokens were never blocked in the first place.
Somewhere this month, a compliance officer is preparing a report to the U.S. Department of the Treasury’s Office of Foreign Assets Control ("OFAC") that lists your frozen tokens—or perhaps no one is preparing such a report because your tokens were never blocked in the first place. The 2026 Annual Report of Blocked Property is due September 30, and OFAC’s filing guidance lists digital assets and cryptocurrency among the reportable asset types.
Whether your tokens were blocked under OFAC sanctions or frozen for another reason determines what you can do next. But the notice from the cryptocurrency exchange may say only that your account is "under review," without telling you whether the platform imposed its own restriction, implemented a stablecoin issuer’s freeze, blocked the tokens under an OFAC sanctions authority, or responded to government process.
Those mechanisms can look identical, but they may involve different decision-makers, procedures, and deadlines. Choosing the wrong path can cost months.
Four mechanisms, one symptom
OFAC administers sanctions authorities requiring U.S. persons to block certain property. The person with possession or control—often an exchange or custodian—implements the block by denying access to the property. But not every frozen account reflects an OFAC block.
Sanctions blocking. A U.S. person determines that property in its possession or control is subject to a blocking requirement. The holder must deny access and report the property.
Platform restriction. An exchange or custodian restricts an account under its own compliance or risk controls. That business decision does not establish that the property is legally blocked.
Issuer-level freeze. A stablecoin issuer uses technical controls to prevent transfers involving an address. It may act under private policies, in response to government process, or to comply with sanctions or other law.
Government seizure or restraint. A warrant, seizure order, restraining order, or forfeiture proceeding places property under government control or restricts its disposition.
The categories can overlap. The first objective is to identify every asserted basis for the restriction.
Ask the holder what happened
Counsel should ask the holder to identify the asserted legal authority, any applicable sanctions program and blocked interest, whether the holder filed a blocked-property report, any identifiers assigned through the
