The correct statement is: It freed all slaves in states rebelling against the Union.
The Emancipation Proclamation, issued by President Abraham Lincoln on January 1, 1863, declared the freedom of all enslaved people in states that were in rebellion against the Union, specifically the Confederate states. However, it did not grant US citizenship or the right to vote to freedmen and freedwomen, nor did it outlaw slavery in the entire United States. Slavery was officially abolished with the 13th Amendment in 1865.