I’ve seen commercial banks reverse wire transfers within the first 30 days.

When you are moving large sums of money between well known institutions the money is very illiquid, mostly to prevent mistakes, fraud, etc. It’s why most fraud that you hear about involves movement of money overseas or into another type of asset or more liquid form, e.g bills, physical goods etc.

No one sits their stolen funds at chase bank… Makes blockchain and NFTs the perfect gateway for fraud.

Why didn't Citi reverse this wire?

https://www.bloomberg.com/opinion/articles/2021-02-17/citi-c...

There's a bit more nuance here than merely Citi wants to reverse a wire transaction. The article explains they were servicing debt and accidentally paid the loan off early (rough summary). The debtors could argue they had no reason to suspect error and viewed the payment as settling the loan.

New payments contracts now include "revlon clawback" clause. The blockchain analogy is a buggy smart contract that gets fixed.

The article explains why.

They asked the Hedge Fund to transfer the money back. Citi is a bank but couldn't reverse this mistaken transaction and had to go to court.

If this was done by check, Citi could have simply cancelled the check.

The receiving bank often takes holds on the funds until they are specifically cleared from the originator bank or a fixed holding period. In that time, you can still deduct the money if you had the cash previously available or maybe if you're in good standing with the bank (not entirely sure on this part, probably different per bank).

The money is often frozen completely then returned to the defrauded party if caught quickly enough. Sometimes banks try to screw over people who are found to be victims of fraudulent transfers after the money has been pulled from the receiving bank.

The receiving bank can have a 7 day hold but that's not by design like a check (DDA) where there's a holding period and you can cancel payment.