Frozen tokens are tokens that have been restricted from being transferred or traded. This restriction is enforced through a mechanism called freeze authority.
How freeze authority works
When freeze authority is enabled, the account holding the tokens can be frozen. While frozen, those tokens cannot be transferred or traded.
Why tokens may be frozen
There are legitimate reasons to freeze tokens, including:
- Security: To prevent fraud, hacking, or unauthorized activity.
- Regulatory compliance: To meet legal or jurisdictional requirements.
However, bad actors can also exploit this feature for scams.
How scammers abuse freeze authority
Scammers may use freeze authority to trap investors and profit dishonestly. A typical scam looks like this:
- Retain freeze authority: The scammer launches a token and keeps freeze authority. This is a major red flag, especially for meme tokens.
- Promote the token: They distribute tokens through airdrops, ICOs, or liquidity pools.
- Manipulate demand: As price and hype grow, more users invest.
- Freeze legitimate holders: The scammer freezes accounts, locking tokens.
- Profit: With others stuck, they sell their own tokens at inflated prices.
How to protect yourself
To avoid scams involving freeze authority:
- Do your research: Look into the project and its team. Avoid tokens from anonymous or unverified creators.
- Check for freeze authority: Be cautious if a token still has this enabled.
Stay safe
Frozen tokens are often part of honeypot scams. If it seems too good to be true, it probably is.
Warning: Phantom doesn't control token creation or freeze settings. We can't unfreeze tokens or override freeze authority.