Freeze and clawback

Some issued tokens can be frozen so they cannot move, or clawed back so the issuer takes them from holders. Those powers exist only if the token’s rules say so. XRP itself is not an issued token and is not clawed back this way.

“On a ledger” does not mean “no one can stop this token.” If you hold someone else’s IOU, read whether they kept a hand on it.

Freeze comes in two shapes. An individual freeze stops one trust line. A global freeze stops the issuer’s tokens from moving between ordinary holders. Clawback is stronger: the issuer can pull tokens back from a holder without that holder signing the payment. Issuers turn clawback on when the account is set up, and they cannot turn that ability off later. If the flag was never set, there is no clawback.

None of this applies to native XRP. It applies to tokens that issuer created. The reason projects use it is compliance: a regulated issuer may have to stop a transfer or undo one. The reason you care is the opposite view: your balance can be stopped or taken if you accepted those rules.

Real example: the XRP Ledger documents both tools for issued tokens. Before you hold a token, check the issuer’s flags instead of trusting the ticker. Source: Clawing back tokens and Freezing issued currencies.