A client's Coinbase account was frozen for 92 days. During those 92 days, he could see his cryptocurrency but could not withdraw, trade, or transfer it. Coinbase's compliance team repeatedly told him that his case was "under review" and that they would respond "as soon as possible." No explanation was given for the freeze, no timeline was provided, and no appeal process was offered. After 60 days, the client contacted us. We filed a complaint with Coinbase's regulator and, within 7 days, the account was unfrozen. The 92-day freeze was not just frustrating — it was unlawful. But the client had no idea what his rights were or how to enforce them.

One of the most common questions I receive from clients is: "How long can the exchange legally keep my account frozen?" The answer depends on the jurisdiction, the reason for the freeze, and whether the exchange is regulated. In this article, I explain the legal time limits for account freezes in the EU, UK, US, and Switzerland, what constitutes an unreasonable freeze, and how to escalate when the exchange holds your account for too long.

The general principle: freezes must be reasonable

Across all major legal systems, the general principle is that an account freeze must be reasonable in duration. The exchange cannot freeze your account indefinitely — it must either complete its investigation within a reasonable time or unfreeze the account. What constitutes "reasonable" depends on the complexity of the case, the jurisdiction, and the reason for the freeze.

The reasoning behind this principle is that an account freeze is a deprivation of property. Your cryptocurrency on the exchange is your property, and the exchange's freeze prevents you from accessing it. In most legal systems, deprivation of property requires due process — including a reasonable timeline for resolution. An indefinite freeze without due process is a violation of property rights.

However, the specific time limits vary significantly by jurisdiction. Some jurisdictions have explicit statutory limits; others rely on case law and regulatory guidance. Here is the breakdown by jurisdiction:

European Union: MiCA framework

Under the EU's Markets in Crypto-Assets regulation (MiCA), which came into full effect in December 2024, Crypto-Asset Service Providers (CASPs) must have documented procedures for freezing and unfreezing accounts. See our MiCA article for the full framework.

MiCA does not specify an exact time limit for freezes, but it requires that:

In practice, NCAs interpret "reasonable timeframe" as 15-30 business days for the initial response, and 30-60 business days for the full resolution. If the CASP has not resolved the freeze within 60 business days (approximately 3 months), the NCA will typically consider the freeze unreasonable and order the CASP to either unfreeze the account or provide a detailed explanation of why the freeze is still necessary.

For EU-regulated exchanges, the practical timeline is:

United Kingdom: FCA and common law

In the UK, the Financial Conduct Authority (FCA) regulates crypto businesses under the Money Laundering Regulations. The FCA requires crypto businesses to have fair, transparent, and timely procedures for handling account freezes. While the FCA does not specify an exact time limit, its guidance states that freezes should be resolved "as quickly as reasonably practicable."

Under English common law, an indefinite freeze without due process may constitute a breach of contract (if the exchange's terms of service imply a reasonable timeline) or a conversion (the tort of wrongful deprivation of property). Users can file a claim in the county court or the high court to compel the exchange to unfreeze the account.

In practice, UK-regulated exchanges typically resolve freezes within 30-60 business days. If the freeze lasts longer than 60 business days without a clear explanation, the user can:

The FOS is particularly effective for individual users — it is free to use, and the FOS has the authority to order the exchange to unfreeze the account and pay compensation. The FOS typically resolves complaints within 8-12 weeks.

United States: state money transmitter laws and federal law

In the US, crypto exchanges are regulated as money transmitters under state law. Each state has its own requirements for how long a money transmitter can hold customer funds. In most states, the money transmitter must either release the funds or provide a written explanation for the hold within 30-90 days.

Key state-specific rules:

At the federal level, the Bank Secrecy Act (BSA) allows financial institutions to freeze accounts for suspicious activity, but the freeze must be reported to FinCEN, and the institution must either complete its investigation or unfreeze the account within a reasonable time. There is no specific federal time limit, but courts have held that freezes lasting longer than 90 days without a clear investigative basis are unreasonable.

Switzerland: FINMA and civil law

In Switzerland, FINMA-licensed crypto businesses must comply with FINMA's guidance on fair treatment of customers. While FINMA does not specify an exact time limit for freezes, its principles require that the business act diligently and in the customer's interest. An indefinite freeze without explanation would violate these principles.

Under Swiss civil law, the user can file a claim for release of property (Freigabeanspruch) under Article 641a of the Swiss Civil Code. This claim compels the exchange to release the frozen property if the exchange has no legal basis for the continued freeze. The claim can be filed in the cantonal court, and the court can order the exchange to release the funds within a specified timeframe.

Swiss courts are typically fast — a provisional order can be obtained within hours, and a full hearing can be scheduled within weeks. See our Swiss FINMA article for more on the Swiss legal framework.

In practice, Swiss-regulated exchanges (Sygnum, SEBA, Swissquote) resolve freezes quickly — typically within 7-14 business days. For exchanges that are not Swiss-regulated but serve Swiss customers, the Swiss consumer protection law applies, and the user can file a complaint with the Swiss Ombudsman for Financial Services.

Unregulated exchanges: no time limits

For exchanges that are not regulated in any of the above jurisdictions (e.g., MEXC, Gate.io, some smaller offshore exchanges), there are no statutory time limits. The exchange can freeze your account for as long as it wants — there is no regulator to complain to, and the exchange's terms of service typically give it broad discretion to freeze accounts "for any reason."

For unregulated exchanges, the only recourse is:

This is why it is important to use regulated exchanges whenever possible. The regulatory framework provides rights and remedies that do not exist with unregulated exchanges.

What constitutes an unreasonable freeze?

A freeze becomes unreasonable when:

How to escalate an unreasonably long freeze

If your account has been frozen for an unreasonable period, escalate through these steps:

In most cases, the exchange will unfreeze the account when the regulator complaint is filed — exchanges do not want to be the subject of a regulatory investigation. If the exchange still refuses, the court order will compel compliance.

Case study: the 92-day freeze

The client I described at the beginning of this article had his Coinbase account frozen for 92 days. We filed a formal complaint with Coinbase's compliance team, citing MiCA's requirement for a reasonable timeline (Coinbase operates in the EU through its Irish entity, regulated by the Central Bank of Ireland). When Coinbase did not respond within 15 business days, we filed a complaint with the Central Bank of Ireland.

The Central Bank contacted Coinbase within 5 business days and requested an explanation. Coinbase responded that the freeze was due to an AML flag triggered by indirect exposure to a sanctioned address. We provided an independent blockchain analytics report showing that the client's address had no direct connection to the sanctioned address and that the indirect exposure was the result of receiving a legitimate payment.

The Central Bank reviewed the documentation and determined that the 92-day freeze was unreasonable — Coinbase had not completed its investigation within a reasonable timeframe and had not provided the client with a clear timeline. The Central Bank ordered Coinbase to unfreeze the account within 7 days. The account was unfrozen within 4 days.

This case illustrates the power of regulatory complaints. The exchange may ignore a user's requests for months, but when the regulator calls, the exchange responds. The key is knowing which regulator to contact and what legal framework to cite.

Compensation for unreasonable freezes

In some jurisdictions, users are entitled to compensation for unreasonable freezes. If the freeze caused financial harm (e.g., the user was unable to sell cryptocurrency that subsequently lost value, or the user was unable to make a time-sensitive payment), the user may be able to claim damages. The availability of compensation depends on the jurisdiction and the exchange's terms of service.

In the UK, the FOS can order the exchange to pay compensation for financial harm caused by an unreasonable freeze. In the EU, MiCA does not explicitly provide for compensation, but national consumer protection laws may apply. In the US, state consumer protection laws may provide for damages. In Switzerland, the user can claim damages under the Swiss Code of Obligations if the freeze was unlawful.

In practice, compensation is rare — most cases are resolved by unfreezing the account, without additional compensation. But if the freeze caused significant financial harm, it is worth pursuing a compensation claim alongside the unfreeze request.

The difference between investigation freezes and enforcement freezes

It is important to distinguish between two types of account freezes: investigation freezes and enforcement freezes. The legal time limits apply differently to each.

An investigation freeze is triggered by the exchange's own AML system. The exchange's compliance team is investigating whether the account is involved in illicit activity. This is the most common type of freeze, and the time limits described above apply. The exchange must complete its investigation within a reasonable period and either unfreeze the account or provide a clear explanation for the continued freeze.

An enforcement freeze is triggered by a law enforcement request. A law enforcement agency (FBI, Europol, national police) has contacted the exchange and requested that the account be frozen pending a criminal investigation. Enforcement freezes are not subject to the same time limits — the exchange is legally required to comply with the law enforcement request, and the freeze remains in place until law enforcement lifts the request. The exchange cannot unfreeze the account even if it wants to — the freeze is mandated by law enforcement, not by the exchange's compliance team.

If your account is subject to an enforcement freeze, the exchange will typically inform you that the freeze is "due to a legal request" or "pursuant to a law enforcement investigation." In this case, escalating to the exchange's regulator will not help — the regulator cannot override a law enforcement request. Instead, you need to engage with the law enforcement agency directly (through legal counsel) to challenge the freeze. This is a much more complex process and requires a different legal strategy.

The distinction between investigation freezes and enforcement freezes is not always clear from the exchange's communications. If you are unsure which type of freeze you are subject to, ask the exchange directly: "Is this freeze based on your internal AML review, or is it based on a law enforcement request?" The exchange is required to inform you if the freeze is based on a law enforcement request (at least in regulated jurisdictions).

Practical tips for expediting the unfreeze process

Beyond the formal escalation steps, there are practical things you can do to expedite the unfreeze process:

The bottom line

The legal time limit for an account freeze depends on the jurisdiction and the type of freeze. For investigation freezes, the reasonable limit is 30-60 business days in most regulated jurisdictions. For enforcement freezes (law enforcement requests), there is no fixed limit — the freeze remains until law enforcement lifts the request. In the EU (under MiCA), the reasonable limit is 60 business days. In the UK, it is 60 business days. In the US, it is 30-90 days depending on the state. In Switzerland, there is no specific limit, but FINMA guidance requires reasonable treatment and Swiss civil law provides a claim for release of property. If your account has been frozen for longer than the reasonable period, escalate: file a formal complaint with the exchange, then a complaint with the regulator, then legal action if necessary. Each step increases the pressure and brings you closer to resolution.

If your account has been frozen for an unreasonable period, contact us. We can assess whether the freeze is unreasonable under the applicable legal framework, file the formal complaint, and escalate to the regulator or court if necessary. In our experience, the mere involvement of legal counsel often accelerates the resolution — exchanges take formal complaints from law firms more seriously than complaints from individual users. We have successfully resolved freezes lasting from 30 days to over 6 months across all major exchanges and jurisdictions, recovering access to millions of dollars in frozen cryptocurrency for our clients.

N. Silinevics
Nils Silinevics Crypto Compliance Counsel · Former FIU Investigator · Valken Legal AG