Illustration by Avery Adamson

Frozen assets are assets you can’t spend or move, because they’ve been ‘frozen’ by the courts or the government.

That’s really cold.

If you take some coins and put them in water in a plastic container, then put the whole thing in the freezer, you’ll get ‘frozen assets.’ You won’t be able to spend the coins, or get them out of the ice quickly.

Nobody does that, of course. But what some people do is to freeze their bank cards into ice blocks in the freezer, to help resist the temptation to spend money.

If you freeze a debit card, you’re ‘freezing’ an asset (debit cards let you spend money you already have in your bank account). If you do it with a credit card, however, you’re just ‘freezing’ your ability to borrow (credit cards let you borrow money).

Sound crazy? Maybe – until someone takes your bank cards and freezes them. Most people don’t freeze their own assets; their assets get frozen for them.

A court can freeze assets in a financial crime case, for example, so a defendant can’t move the money out of the court’s reach until the case is resolved. It can freeze the assets of someone who owes a large fine, to make sure they pay that fine. And it can freeze assets in a divorce case, to make sure one spouse doesn’t try to abscond with the couple’s assets until the case is resolved.

Governments can freeze assets too. For example, the IRS can freeze and even seize your bank account if it believes you owe back taxes and aren’t paying them. The government can even freeze assets of entire countries which it’s trying to sanction (punish) for bad behavior. It does this by asking banks in its jurisdiction not to let those countries move the money. The U.S. has done this with countries like Russia, Iran, North Korea, and Venezuela. It has also frozen the assets of suspected terrorists and their supporters.

Freezing assets is an extreme (and really cold!) move, whether you’re putting someone’s debit card in the freezer or preventing a criminal organization from transferring billions of dollars.

And it’s not easy to do… because nobody likes to be frozen out.