Token Freeze

Definition ∞ A token freeze is a mechanism that temporarily prevents a specific cryptocurrency token from being transferred or traded. This action is typically implemented by the token issuer or a governing protocol to enforce specific conditions, such as regulatory compliance, security measures, or vesting schedules. Frozen tokens remain in their respective wallets but are rendered inaccessible for external movement.
Context ∞ Token freezes are often enacted in response to security incidents, regulatory investigations, or the planned distribution of tokens in initial offerings. News reports may detail instances where tokens belonging to compromised wallets or specific participants in a decentralized autonomous organization (DAO) have been frozen. The governance mechanisms and legal frameworks surrounding token freezes are subjects of ongoing deliberation.