Earlier this week, Italian police confirmed that chairman Ettote Gotti Tedeschi is being investigated over claims he did not follow strict rules about money laundering.
The scandal is centred on two transactions, totalling â¬23 million (Â£19 million, $30.7 million), which alerted tax police to possible improper activity.
Italian news source Corriere della Sera has suggested that police may unfreeze the assets if the Vatican can confirm who the money was intended for, reports Bloomberg.
In a statement, the Vatican Bank expressed "puzzlement and amazement" over the allegations, which come just one week after the Pope's visit to Britain.
Claiming that the transaction is above board, the institution said that all "necessary information is already available at the office of the Bank of Italy".
It added: "Similar transactions commonly take place with other Italian banks."
Mr Tedeschi was appointed as the head of the Institute for Works of Religion last year and reports to a committee of cardinals within the Vatican.
Reports of money laundering within Vatican Bank first surfaced last year following an investigation by Italian magazine Panorama.
By Claire Archer