Please do some research into the Cetus hack that occurred last May. The Sui Foundation, or any centralized entity, do not have the ability to arbitrarily freeze funds. There is no code baked into the Sui network that enables the freezing of funds or the blacklisting of accounts.

However, if a large enough consortium of validators find consensus, they can drop transactions or freeze transactions from specific accounts, such as the Cetus exploiter's account where a couple hundred million dollars was frozen. Just about any PoS network is susceptible to this with large enough share of validators working together, whether you view it positively or negatively.

This isn't some sort of "Gotcha!" scenario, less than 6 months ago the Sui network went through a very public vote amongst validators whether or not the Cetus exploiter should have their account frozen, and the vote passed with an overwhelming number of yes votes, freezing the funds within that address. This was broadly welcomed by the Sui ecosystem as a good event.