I do it all the time, especially when onions are on sale. I use them for cooking only.
I've never heard that frozen onions cause cancer. I've purchased frozen chopped onions at the grocery store, and haven't given it a second thought. I'm pretty sure I've purchased frozen stir fry mixes containing onion, and I think I've seen frozen onion rings. That leads me to believe it is probably safe. But, honestly, it isn't something I've ever looked in to. If you are very concerned about frozen chopped onions causing cancer, you might get better information from your doctor/dietician/nutritionist, than from someone here.
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