When a legitimate exchange freezes an account or becomes insolvent, the path is usually legal and procedural rather than technical: account reviews, complaints, claims processes and court proceedings.
This page explains why accounts get frozen, what happens when an exchange fails, and what you can do.
Exchange freezes and collapses
There are two very different situations. In an account freeze, the exchange is operating normally but has restricted your account — often for a compliance review, a disputed identity check, or because funds you received were flagged as linked to fraud.
In a collapse, the exchange itself stops withdrawals for everyone, usually because it does not have enough assets to cover customer balances. That typically leads to restructuring or bankruptcy proceedings, sometimes in another country.
It is also important to rule out a third situation: a 'platform' that was never a real exchange. If it asks you to pay fees to unfreeze your account, see our page on fake investment platforms.
How it works, step by step
- 1Step 1
The trigger
A large deposit or withdrawal, a change of device or location, funds received from a flagged address, or a regulator action against the exchange.
- 2Step 2
The restriction
Withdrawals or trading are disabled. You may be asked for more identity documents, source-of-funds evidence, or simply told the account is 'under review'.
- 3Step 3
Slow or no communication
Support tickets go unanswered or receive template replies. For a failing exchange, public announcements become vague and withdrawal delays grow.
- 4Step 4
Formal proceedings (in a collapse)
The exchange files for protection or bankruptcy. A monitor, trustee or administrator takes control and sets a claims process and deadlines for customers.
Where the money goes
In an account freeze, your assets are generally still held by the exchange. The question is under what conditions it must release them, and how quickly.
In a collapse, customer assets may have been mixed with company funds, lent out or lost. What customers receive depends on the exchange's terms, the law that governs the proceedings, and whether assets were held in trust.
Claims deadlines in insolvency proceedings are strict. Missing one can mean losing the right to share in any distribution.
What to watch out for
Withdrawal 'delays' that keep growing
Temporary pauses that become indefinite, especially combined with unusually high interest offers.
Not registered in Canada
Crypto trading platforms serving Canadians must register with the Canadian Securities Administrators. Unregistered platforms offer less protection.
Paying to unfreeze
A real exchange will ask for documents, not for a deposit or fee to release your funds.
Silence from management
Executives stop posting, audits are delayed, or reserves can no longer be verified.
What to do right now
- 1
Document your balance
Download account statements, transaction history and screenshots of your balance today, while you still have access.
- 2
Put it in writing
Send a formal written request to release the funds, and keep copies of every ticket and reply.
- 3
Watch for claims deadlines
If the exchange has entered formal proceedings, find the official monitor or trustee website and register your claim.
- 4
Ignore 'priority claim' offers
Scammers contact customers of failed exchanges offering faster payouts for a fee. Use only the official process.
What to gather for your case review
- Account statements and full transaction history
- Your identity verification records and all support tickets
- The exchange's terms of service at the time you deposited
- Any notices from the exchange, regulator, monitor or trustee
Ask for your recovery phrase or private key — never.
How we can help
What we can do
- Prepare and send formal complaints and escalations on your behalf.
- Help you file and follow claims in insolvency or creditor proceedings.
- Connect you with independent partner lawyers when individual or group legal action is the right route.
What we cannot do
- We cannot predict what share of assets an insolvent exchange will return.
- We cannot bypass a court-supervised claims process.
Frequently asked questions
Is the first case review really free?
Yes. It costs nothing and does not commit you to anything. We will tell you honestly whether we think your case can succeed — and if we don't think we can help, we'll say so and point you to what you can do next.
What information should I have ready?
Whatever you have: transaction IDs (hashes), wallet addresses you sent to, the name and website of the platform, screenshots of chats and of the platform, exchange statements, and your police or CAFC report number.
Never send us your recovery phrase, private keys or passwords. We do not need them.