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Just wanted to say in case others see this, you can buy a .xyz domain from reputable places (maybe for a higher cost). I believe the OP is talking about the specific site 'gen.xyz'.
I have an xyz domain with Cloudflare, host many things on it (like Jellyfin), and haven't had any issues yet.
Edit: as many have pointed out, my understanding of registrars was wrong and gen.xyz actually owns all xyz tlds. Sleep in fear if you own one I suppose
The thing is that gen.xyz is the registrar itself, i.e. the highest authority for this tld. If they blacklist domains, you're screwed.
Locks can happen by registrar (I.e.: ninjala, cloudflare, namecheap etc.) or registry (I.e.: gen.xyz, identity digital, verisign, etc.).
Typically, registry locks cannot be resolved through your registrar, and the registrant may need to work with the registry to see about resolving the problem. This could be complicated with Whois privacy as you may not be considered the registrant of the domain.
In all cases, most registries do not take domain suspensions lightly, and generally tend to lock only on legal issues. Check your Whois record’s EPP status codes to get hints as to what may be happening.