Your company transfers cryptocurrency to an exchange to convert it into dollars for an upcoming payment. The deposit arrives, but withdrawals are disabled. Support asks for additional documents. You provide them, then receive another message saying the account remains “under review.”

The balance is still visible. You cannot use it. Nobody will explain when that will change.

A frozen crypto exchange account can involve anything from an identity-verification problem to a government seizure. The appropriate response depends on who imposed the restriction, what it covers, and the legal or contractual basis for keeping it in place. Establishing those facts is usually more productive than immediately threatening litigation.

Identify what is actually frozen

“Frozen” is a description of the problem, not its legal classification. An exchange might restrict withdrawals while allowing trading, disable the entire account, or hold only a particular deposit. A platform-wide interruption raises different questions from a restriction affecting one customer.

Start by recording which functions remain available. Determine whether the restriction affects cash, every digital asset, one token, or a specific transaction. Ask whether the exchange requires documents, an account-security action, or completion of another review.

Also distinguish an exchange account restriction from a token issuer’s on-chain freeze. Restoring exchange access may not make an issuer-restricted token transferable. Conversely, an exchange can restrict withdrawals even when the underlying tokens remain transferable on the blockchain.

Kelman’s discussion of customer rights following an exchange security incident explains why access restrictions, missing assets, and compensation claims require separate analysis. An inaccessible balance does not, by itself, establish theft or insolvency.

Verification delays call for a focused response

An account review may concern an expired identification document, a change in beneficial ownership, inconsistent business information, or the source of a deposit.

For example, a company registered as a software developer might begin receiving substantial payments from unrelated wallets. The exchange may need an explanation connecting those payments to the business described during onboarding.

A useful response provides that connection: the relevant invoices, customer agreements, transaction hashes, and a concise explanation of the payment flow. Sending an unorganized folder of documents can create more questions than it answers.

For a business account, confirm that the person communicating with the exchange is authorized to act for the account holder. A founder’s personal identification may not resolve a request for corporate ownership records.

Submit sensitive documents through verified channels. Keep copies of each request and response, and ask the exchange to identify any remaining deficiencies. Never provide private keys, seed phrases, or authentication codes to someone offering to “unlock” the account.

Compliance restrictions do not always come with a full explanation

An exchange may investigate suspected fraud, sanctions exposure, or transactions inconsistent with a customer’s profile. Limited disclosure can be frustrating, but it does not necessarily mean the exchange has no legal explanation.

Under 31 C.F.R. § 1022.320(d), covered money services businesses generally cannot disclose a suspicious activity report or information revealing its existence. That confidentiality rule does not itself establish an unlimited right to retain customer assets. Nor should a customer infer from a generic compliance message that a report was filed.

Sanctions blocking is different. As OFAC’s guidance on blocked virtual currency explains, a U.S. person holding virtual currency that must be blocked must deny access, with release permitted through OFAC authorization or when the applicable legal prohibition ends.

The response may therefore require correcting a mistaken identity match, documenting ownership, or evaluating an authorization request. Repeated withdrawal attempts will not resolve a genuine legal prohibition. Do not try to bypass restrictions through another person’s account or misleading information.

The account agreement determines important rights and procedures

Identify the legal entity responsible for the account. An exchange’s brand name may cover several companies, products, and jurisdictions. The contracting entity is not necessarily the company whose name appears most prominently online.

Preserve the agreement applicable to your account and the relevant period. Review its withdrawal provisions, suspension rights, termination process, liability limitations, governing law, and dispute-resolution requirements.

For example, Coinbase’s U.S. user agreements distinguish individual and business relationships and contain complaint and arbitration provisions. That illustrates why a retail customer’s procedure should not automatically be applied to an institutional account.

A restriction initially permitted by the agreement may still raise questions about its duration, scope, or administration. Counsel should assess what the exchange promised, what conditions justified the hold, and whether those conditions remain satisfied. A long delay is important evidence, but it does not establish a breach without that analysis.

Build a record before escalating

A focused evidence package helps both internal reviewers and outside counsel understand the dispute. Preserve:

• Account statements, balances, asset quantities, and transaction exports.
• Deposit and withdrawal addresses, transaction hashes, and transfer confirmations.
• Restriction notices, failed withdrawal messages, and dated screenshots.
• Support tickets, document submissions, and responses.
• Account agreements, amendments, and relevant notices.
• Records explaining ownership, source of funds, and actual financial consequences.

Prepare a short chronology identifying when the restriction began, what the exchange requested, and when you responded. Distinguish facts from assumptions.

If you seek compensation, document the loss separately from the inaccessible balance. Borrowing costs or failed-payment charges may be easier to substantiate than a claim that you would have sold at a particular market peak. Recoverability still depends on applicable law, causation, contractual limitations, and reasonable mitigation.

Match the escalation to the problem

A formal complaint or counsel’s demand should identify the account, summarize the record, explain the requested relief, and follow applicable notice procedures. Where lawful and operationally possible, a request to release an undisputed portion may be more useful than demanding immediate restoration of every service.

A complaint to the appropriate regulator may also prompt review. It does not substitute for contractual procedures, guarantee compensation, or necessarily stop a limitation period from running.

If informal efforts fail, counsel can assess arbitration or litigation. Under Section 2 of the Federal Arbitration Act, qualifying written arbitration agreements generally are enforceable, subject to applicable exceptions and defenses. The particular agreement may include preliminary steps, small-claims options, or provisions addressing emergency relief.

The claim might concern breach of contract or another recognized legal duty. A conversion claim is not automatically available whenever a withdrawal is delayed; ownership, the nature of the assets, and governing law matter.

Emergency relief requires additional analysis. Federal Rule of Civil Procedure 65 imposes procedural requirements for injunctions and restraining orders. A large frozen balance alone does not establish entitlement to immediate court intervention; counsel must evaluate the applicable substantive standard, including irreparable harm.

Government restraints require a different strategy

If an exchange identifies a seizure warrant, court order, or law-enforcement request, seek the issuing authority, reference number, affected property, and available documentation. Some information may be sealed or otherwise restricted.

A request and a binding order are different instruments. Counsel should determine what was communicated, whether compliance was mandatory, and what independently supports continued retention.

Where federal civil forfeiture is involved, 18 U.S.C. § 983 establishes claim procedures and deadlines that can require action outside the exchange’s complaint system. A support ticket does not preserve forfeiture rights. The proper remedy depends on the proceeding, your ownership interest, and the restraint’s legal basis.

Kelman PLLC’s litigation and arbitration practice addresses digital asset disputes. If a substantial exchange balance remains inaccessible, contact Kelman PLLC to discuss the account records, the stated restriction, and the available options.

Attorney Advertising. This article provides general information, not legal advice, and does not create an attorney-client relationship. Available remedies depend on the facts, applicable law, and account terms.