Because you cheated in the freeroll and cheaters have ALL of their accounts seized? Why would you think that it was OK to cheat in a freeroll?
It is definitely not ok to cheat in freerolls. But, freezing ALL the funds a little too big of an outcome of the situation. If it was a normal tournament then it would be fine. But cheating for 1 chip, and getting account frozen, is a bit of a long stretch. Seals, should probably, just ban him from playing, and return the funds.
Sometimes we offer really juicy freerolls, like tonight's 400 chip "anyone can enter" during DonkDown radio. If someone tries to cheat the system, they risk losing their entire balance. We want this information to be very loud, very public, because then maybe this will cause cheaters to think twice about trying to rape SwC player equity.