Part of the CustodyStress archive of observed Bitcoin custody incidents
Vendor lockout
Cases in this category involve custody services or platforms that became inaccessible, either through insolvency, policy changes, or loss of account access.
Vendor lockout cases document the dependency risk of exchange and custodial custody. Cases range from regulatory seizure and bankruptcy to account verification failures and platform discontinuation. A recurring pattern is that users assumed institutional custody provided access redundancy; in practice, the institution itself was the single point of failure.
170 observed cases
Blocked
22 (13%)
Constrained
83 (49%)
Survives
48 (28%)
Indeterminate
17 (10%)
Bahamian regulators seized approximately $3.5 billion in assets from FTX Digital
Exchange custody
International FTX customers—particularly those on FTX.com rather than the US-only FTX.US—found their accounts immediately frozen when FTX filed for bankruptcy.
On 10 November 2022, BlockFi paused client withdrawals as FTX contagion spread.
Exchange custody
On 10 November 2022, BlockFi paused client withdrawals as FTX contagion spread. BlockFi had significant exposure to FTX, including a $400 million revolving cred
Genesis eventually filed for bankruptcy in January 2023.
Exchange custody
On 16 November 2022, Genesis Global Capital suspended customer withdrawals, citing its $175 million locked in FTX and abnormal withdrawal requests following FTX
Bitfront, a US-licensed exchange operated by Line Corporation, announced on 28 November
Exchange custody
Bitfront, a US-licensed exchange operated by Line Corporation (a Japanese tech company), announced on 28 November 2022 that it was shutting down and gave custom
On 11 November 2022, FTX and approximately 130 affiliated companies filed for Chapter
Exchange custody
On 8 November 2022, FTX halted customer withdrawals after a liquidity crisis triggered by revelations about its balance sheet. On 11 November 2022, FTX and appr
Institutional lockout — exchange custody (2022)
Exchange custody
Crypto lending platform Nexo announced in October 2022 that it was winding down its US operations following regulatory pressure from multiple state attorneys ge
Institutional lockout — Gemini (2022)
Exchange custody
Gemini's approximately 350,000 Earn customers discovered in November 2022 that their assets—estimated at approximately $1 billion—were locked inside Genesis and
Platform bankruptcy — FTX (2022)
Exchange custody
FTX customers in Japan found themselves in a separate legal proceeding from the main US bankruptcy after Japanese regulators at the FSA moved quickly to ring-fe
Platform bankruptcy — FTX (2022)
Exchange custody
Following the FTX collapse, crypto exchange Liquid Global—which had been acquired by FTX in early 2022—also suspended withdrawals. Liquid customers had believed
Institutional lockout — FTX (2022)
Exchange custody
FTX's collapse triggered a bank-run dynamic across the entire crypto exchange sector, with customers on Binance, OKX, and Crypto.com withdrawing billions in the
Account frozen — exchange custody (2022)
Exchange custody
The Terra/LUNA collapse in May 2022 prompted multiple South Korean exchanges including Upbit and Bithumb to temporarily suspend LUNA and UST trading and withdra
Platform bankruptcy — FTX (2022)
Exchange custody
As the FTX bankruptcy estate began the lengthy claims submission process in December 2022, creditors were required to submit proof-of-claim forms through a digi
Institutional lockout — FTX (2022)
Exchange custody
Crypto lender Salt Lending suspended withdrawals in December 2022 citing FTX exposure and difficult market conditions. Borrowers who had posted Bitcoin as colla
Platform bankruptcy — Celsius (2022)
Exchange custody
Celsius creditors who filed objections in the bankruptcy court over the classification of Earn accounts as unsecured loans discovered in late 2022 that the lega
Platform bankruptcy — FTX (2022)
Exchange custody
The December 2022 arrest of Sam Bankman-Fried in the Bahamas triggered an additional freezing event for certain FTX-affiliated wallets that were under investiga
Institutional lockout — Voyager (2022)
Exchange custody
Three Arrows Capital, a major crypto hedge fund, defaulted on a $650 million loan from Voyager Digital in late June 2022 and was ordered into liquidation by a B
Institutional lockout — Celsius (2022)
Exchange custody
Throughout the June 2022 crypto market crash—triggered by the Terra collapse and tightening monetary policy—multiple centralized lending platforms simultaneousl
Institutional lockout — exchange custody (2022)
Exchange custody
Babel Finance, a Hong Kong-based crypto lending firm, froze withdrawals on 17 June 2022 citing 'unusual liquidity pressures.' The company had approximately $2 b
Platform bankruptcy — Celsius (2022)
Exchange custody
Celsius customers outside the United States faced additional barriers to participating in the US bankruptcy process in 2022. Filing a proof of claim in a US Cha
Platform bankruptcy — Celsius (2022)
Exchange custody
Following the Celsius bankruptcy filing, customers who held assets in Celsius's Custody accounts—a separate product marketed as segregated, non-yielding storage
The court approved the release of approximately $270 million in cash held in Voyager's
Exchange custody
In August 2022, distressed Voyager customers submitted letters to the bankruptcy judge in New York begging for their funds back. Many described having deposited
The Celsius estate continued to accrue collateral management fees post-petition.
Exchange custody
Celsius customers who had borrowed against their Bitcoin as collateral on the platform faced a specific and acute custody problem: their collateral—held by Cels
Platform bankruptcy — Voyager (2022)
Exchange custody
Voyager's bankruptcy court approved the payment of customer cash balances in August 2022, returning approximately $270 million in FDIC-insured funds held at Met
Exchanges including Kraken, Binance, and OKX published Merkle-tree-based reserve proofs.
Exchange custody
Following the wave of exchange insolvencies in 2022, several surviving centralized exchanges introduced proof-of-reserves audits in Q4 2022 in response to custo
AAX Exchange suspended withdrawals on 13 November 2022, citing a 'system upgrade,'
Exchange custody
In the weeks following FTX's collapse, several smaller exchanges and lending platforms that had significant FTX exposure—including Liquid Global, AAX Exchange,
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