Overview
- The Financial Services Commission is reviewing a system that would block withdrawals, transfers, and payments on crypto accounts suspected of manipulation before cash-outs occur.
- Officials discussed the approach in a closed November meeting, and fresh reports this week indicate the proposal remains under active consideration rather than law.
- The mechanism would mirror powers added to the Capital Markets Act in April 2025 that were used in September to freeze 75 accounts in a stock-manipulation case, preserving significant unrealized gains.
- Regulators argue court-warrant freezes arrive too slowly for fast-moving schemes such as front‑running, automated wash trading, high‑price buy orders, and coordinated profit‑taking.
- The review is part of a broader Phase Two push that includes potential exchange liability for hacks and tax authorities’ warnings that cold‑wallet holdings can be searched and seized.