- VeChain disputes Bybit’s claim and emphasizes that a one-time, limited lockout only took place in 2019.
- Independent audits confirm this and prove that validators make the choice and that there is no locking mechanism that can be activated.
VeChain defended itself against this Claims by Bybit’s Lazarus Security Lab, which accused the blockchain of operating a “hidden” mechanism to freeze funds. The company called the report “factually incorrect and damaging to its reputation” and emphasized that it has never implemented or maintained a freeze feature in its protocol.
The allegations stem from a Bybit study that grouped VeChain with 15 other blockchains that are said to be capable of instantly freezing users’ assets. The report, published on November 12, 2025, claimed that VeChain uses a “permanent, hard-coded blacklist of addresses” and described this as evidence of embedded fund control.
VeChain strongly denied these claims and clarified that the only relevant incident occurred almost six years ago. In December 2019, the VeChain community approved a one-time blacklist after a private key theft resulted in the compromise of a single wallet.
On-chain records prove full transparency
After the theft, validators updated their node software and blocked all transactions coming from the attackers’ wallets. This decision prevented the stolen funds from being liquidated, but did not result in confiscation or redistribution. Later, the community agreed to burn about 727 million VET so that the compromised tokens would not come back into circulationcould .
The platform emphasized that the decision was transparent and fully recorded on-chain. She added that “the funds were not confiscated or redistributed,” pointing out ByBit’s claim back that the process has built-in freezing power. Instead, the measure was an isolated governance action that did not change the base code of the blockchain.
The company explained that the validators fulfilled their responsibilitiesby rejecting the transactions of the identified wallets. It added that this was done through a consensus process in which “no single party has the unilateral power to move or freeze funds.”
Current audits refute the Bybit claim
Recent audits further support VeChain’s statement. NCC Group completed the security review of VeChainThor Galactica on May 6, 2025, which included updates from VIP-242 to VIP-252. The review found only two issues and the team fixed both. The auditors also advised the project to increase client diversity to improve security.
In May 2025, Coinspect conducted another audit and found a moderate issue. The team later fixed it. The report confirmed that the software includes blocklist checking at the consensus level and explained that this feature has limited functionality and is dependent on governance. Previously, Hacken reviewed VeChain’s account abstraction and marketplace as a service from 2023 to 2024 and reported similar results.
These independent reviews contradict Bybit’s claim that VeChain has built-in freeze controls. Each audit confirmed that the network runs through a validation agreement and not a unilateral authority.
The platform asked media groups that cited Bybit’s investigation to update their reporting to include the company’s full statement. The company said the report confused two different terms in its protocol. One idea is “blocking,” which results from validator selection. The other term is “freeze,” which comes from a protocol rule. The company called this mix-up a major technical misinterpretation that harms public understanding.
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