Until today I thought that, because Tether had to ask Omni for a hardfork to quarantine stolen USDT after the hack on November 19, 2017, freezing funds would require another Omni hardfork to freeze other addresses, and small fish would be safe here. However they lied in their press release
Note that this software will cause a consensus change to currently running Omni Core clients, meaning that it is effectively a temporary hard fork to the Omni Layer. Integrators running this build will not accept any token sends from the attacker’s address, preventing the coins from moving further from the attacker’s address.
What they actually did was permanently corrupting Omni that was decentralized before.
https://github.com/OmniLayer/omnicore/commits/master?before=1c0ae8ae01ed79ae3715a16124e8acb98cb67800+4725&branch=master
Conspiracy theory, Tether hacked themselves on purpose so they can lick authority boots and have better compliance.
Any ETH smartcontract may include a token blocking function and any funds may be blocked.
Probably true for any shady crypto even if not a smartcontract.