Frozen IOUs should still be transferable to/from the issuer

src/libxrpl/ledger/View.cpp

@@ -234,7 +234,7 @@ isFrozen(
     if (isXRP(currency))
         return false;
     auto sle = view.read(keylet::account(issuer));
-    if (sle && sle->isFlag(lsfGlobalFreeze))
+    if (sle && sle->isFlag(lsfGlobalFreeze) && issuer != account)
         return true;
     if (issuer != account)
     {

src/test/app/Freeze_test.cpp

@@ -1,6 +1,7 @@
 #include <test/jtx.h>
 #include <test/jtx/AMM.h>
 
+#include <xrpl/ledger/View.h>
 #include <xrpl/protocol/AccountID.h>
 #include <xrpl/protocol/Feature.h>
 #include <xrpl/protocol/SField.h>
@@ -2002,6 +2003,57 @@ class Freeze_test : public beast::unit_test::suite
         }
     }
 
+    void
+    testIsFrozenDirectly(FeatureBitset features)
+    {
+        testcase("isFrozen function issuer exemption");
+
+        using namespace test::jtx;
+        Env env(*this, features);
+
+        Account issuer{"issuer"};
+        Account holder{"holder"};
+
+        env.fund(XRP(10000), issuer, holder);
+        env.close();
+
+        auto const USD = issuer["USD"];
+        env.trust(USD(1000), holder);
+        env.close();
+
+        env(pay(issuer, holder, USD(100)));
+        env.close();
+
+        // Before global freeze, neither account is frozen
+        BEAST_EXPECT(
+            !isFrozen(*env.current(), issuer.id(), USD.currency, issuer.id()));
+        BEAST_EXPECT(
+            !isFrozen(*env.current(), holder.id(), USD.currency, issuer.id()));
+
+        // Enable global freeze
+        env(fset(issuer, asfGlobalFreeze));
+        env.close();
+
+        // After global freeze, issuer is NOT frozen for their own currency
+        BEAST_EXPECT(
+            !isFrozen(*env.current(), issuer.id(), USD.currency, issuer.id()));
+
+        // After global freeze, holder IS frozen
+        BEAST_EXPECT(
+            isFrozen(*env.current(), holder.id(), USD.currency, issuer.id()));
+
+        // Verify issuer can still receive payments (uses isFrozen internally)
+        env(pay(holder, issuer, USD(10)));
+        env.close();
+
+        // Verify holder cannot send to other accounts
+        Account other{"other"};
+        env.fund(XRP(10000), other);
+        env.trust(USD(1000), other);
+        env.close();
+        env(pay(holder, other, USD(10)), ter(tecPATH_DRY));
+    }
+
     // Helper function to extract trustline flags from open ledger
     uint32_t
     getTrustlineFlags(
@@ -2065,6 +2117,7 @@ class Freeze_test : public beast::unit_test::suite
             testCreateFrozenTrustline(features);
             testSetAndClear(features);
             testGlobalFreeze(features);
+            testIsFrozenDirectly(features);
             testNoFreeze(features);
             testOffersWhenFrozen(features);
             testOffersWhenDeepFrozen(features);

src/test/app/LoanBroker_test.cpp

@@ -1436,6 +1436,63 @@ class LoanBroker_test : public beast::unit_test::suite
         });
     }
 
+    void
+    testIssuerCoverDepositDuringGlobalFreeze()
+    {
+        testcase("Issuer can deposit to broker during global freeze");
+        using namespace jtx;
+        using namespace loanBroker;
+
+        Account const issuer{"issuer"};
+        Account const holder{"holder"};
+        Env env(*this);
+        Vault vault{env};
+
+        env.fund(XRP(100'000), issuer, holder);
+        env.close();
+
+        PrettyAsset const asset = issuer["IOU"];
+        env.trust(asset(1'000'000), holder);
+        env.close();
+        env(pay(issuer, holder, asset(100'000)));
+        env.close();
+
+        auto [tx, vaultKeylet] =
+            vault.create({.owner = issuer, .asset = asset});
+        env(tx);
+        env.close();
+
+        env(vault.deposit(
+            {.depositor = holder, .id = vaultKeylet.key, .amount = asset(50)}));
+        env.close();
+
+        auto const brokerKeylet =
+            keylet::loanbroker(issuer.id(), env.seq(issuer));
+        env(set(issuer, vaultKeylet.key));
+        env.close();
+
+        auto broker = env.le(brokerKeylet);
+        if (!BEAST_EXPECT(broker))
+            return;
+
+        env(fset(issuer, asfGlobalFreeze));
+        env.close();
+
+        // Issuer CAN deposit to their own broker during global freeze
+        // This is the issuer exemption - issuer can always send (issue) their
+        // own tokens Per spec: "Counterparties of the frozen issuer can still
+        // send and receive payments directly to and from the issuing address."
+        env(coverDeposit(issuer, brokerKeylet.key, asset(10)));
+        env.close();
+
+        // Verify the deposit succeeded
+        broker = env.le(brokerKeylet);
+        if (BEAST_EXPECT(broker))
+        {
+            BEAST_EXPECT(broker->at(sfCoverAvailable) == asset(10).number());
+        }
+    }
+
 public:
     void
     run() override
@@ -1450,6 +1507,7 @@ class LoanBroker_test : public beast::unit_test::suite
         testInvalidLoanBrokerDelete();
         testInvalidLoanBrokerSet();
         testRequireAuth();
+        testIssuerCoverDepositDuringGlobalFreeze();
 
         // TODO: Write clawback failure tests with an issuer / MPT that doesn't
         // have the right flags set.

src/test/app/Vault_test.cpp

@@ -5243,6 +5243,46 @@ class Vault_test : public beast::unit_test::suite
         });
     }
 
+    void
+    testFrozenWithdrawToIssuer()
+    {
+        using namespace test::jtx;
+
+        testcase("frozen IOU can be withdrawn to issuer");
+
+        Env env{*this, testable_amendments() | featureSingleAssetVault};
+        Account issuer{"issuer"};
+        Account owner{"owner"};
+        Account depositor{"depositor"};
+        env.fund(XRP(1000), issuer, owner, depositor);
+        env.close();
+
+        PrettyAsset asset = issuer["IOU"];
+        env.trust(asset(1000), owner);
+        env.trust(asset(1000), depositor);
+        env(pay(issuer, owner, asset(100)));
+        env(pay(issuer, depositor, asset(200)));
+        env.close();
+
+        Vault vault{env};
+        auto [tx, keylet] = vault.create({.owner = owner, .asset = asset});
+        env(tx);
+        env.close();
+
+        env(vault.deposit(
+            {.depositor = depositor, .id = keylet.key, .amount = asset(50)}));
+        env.close();
+
+        env(fset(issuer, asfGlobalFreeze));
+        env.close();
+
+        auto withdraw = vault.withdraw(
+            {.depositor = depositor, .id = keylet.key, .amount = asset(10)});
+        withdraw[sfDestination] = issuer.human();
+        env(withdraw, ter{tesSUCCESS});
+        env.close();
+    }
+
 public:
     void
     run() override
@@ -5261,6 +5301,7 @@ class Vault_test : public beast::unit_test::suite
         testScaleIOU();
         testRPC();
         testDelegate();
+        testFrozenWithdrawToIssuer();
     }
 };
 

src/xrpld/app/tx/detail/LoanBrokerCoverDeposit.cpp

@@ -75,7 +75,14 @@ LoanBrokerCoverDeposit::preclaim(PreclaimContext const& ctx)
             requireAuth(ctx.view, vaultAsset, account, AuthType::StrongAuth))
         return ret;
 
-    if (accountHolds(
+    // IOU issuers have infinite issuance ability and don't have a "balance"
+    // of their own tokens (accountHolds returns 0 for them). Skip the balance
+    // check for issuers. Note: issuer freeze exemption is handled by the
+    // isFrozen() function. This exemption does not apply to MPTs.
+    bool const isIssuer =
+        vaultAsset.holds<Issue>() && account == vaultAsset.getIssuer();
+    if (!isIssuer &&
+        accountHolds(
             ctx.view,
             account,
             vaultAsset,

src/xrpld/app/tx/detail/VaultWithdraw.cpp

@@ -80,13 +80,23 @@ VaultWithdraw::preclaim(PreclaimContext const& ctx)
         return ter;
 
     // Cannot withdraw from a Vault an Asset frozen for the destination account
-    if (auto const ret = checkFrozen(ctx.view, dstAcct, vaultAsset))
-        return ret;
+    if (!vaultAsset.holds<Issue>() ||
+        (dstAcct != vaultAsset.getIssuer() &&
+         account != vaultAsset.getIssuer()))
+    {
+        if (auto const ret = checkFrozen(ctx.view, dstAcct, vaultAsset))
+            return ret;
+    }
 
     // Cannot return shares to the vault, if the underlying asset was frozen for
     // the submitter
-    if (auto const ret = checkFrozen(ctx.view, account, vaultShare))
-        return ret;
+    if (!vaultAsset.holds<Issue>() ||
+        (dstAcct != vaultAsset.getIssuer() &&
+         account != vaultAsset.getIssuer()))
+    {
+        if (auto const ret = checkFrozen(ctx.view, account, vaultShare))
+            return ret;
+    }
 
     return tesSUCCESS;
 }
@@ -115,6 +125,7 @@ VaultWithdraw::doApply()
 
     auto const amount = ctx_.tx[sfAmount];
     Asset const vaultAsset = vault->at(sfAsset);
+    auto const dstAcct = ctx_.tx[~sfDestination].value_or(account_);
     MPTIssue const share{mptIssuanceID};
     STAmount sharesRedeemed = {share};
     STAmount assetsWithdrawn;
@@ -165,11 +176,21 @@ VaultWithdraw::doApply()
         return tecPATH_DRY;
     }
 
+    // When withdrawing IOU to the issuer, ignore freeze since spec allows
+    // returning frozen IOU assets to their issuer. MPTs don't have this
+    // exemption - MPT locks function like "deep freeze" with no issuer
+    // exception.
+    FreezeHandling const freezeHandling = (vaultAsset.holds<Issue>() &&
+                                           (dstAcct == vaultAsset.getIssuer() ||
+                                            account_ == vaultAsset.getIssuer()))
+        ? FreezeHandling::fhIGNORE_FREEZE
+        : FreezeHandling::fhZERO_IF_FROZEN;
+
     if (accountHolds(
             view(),
             account_,
             share,
-            FreezeHandling::fhZERO_IF_FROZEN,
+            freezeHandling,
             AuthHandling::ahIGNORE_AUTH,
             j_) < sharesRedeemed)
     {
@@ -237,8 +258,6 @@ VaultWithdraw::doApply()
         // else quietly ignore, account balance is not zero
     }
 
-    auto const dstAcct = ctx_.tx[~sfDestination].value_or(account_);
-
     return doWithdraw(
         view(),
         ctx_.tx,