Xcode Clipboard: Copy & Paste stuck
Also read in the Apple forums that closing the simulator while working fixes this issue. So if it happens to me I close the simulator and copy-paste works fine from that point forwards.
Haven't tried it yet but I have feeling that Eva's answer is correct in that the simulator is trying to sync your pasteboard.
Apple forum article
** Edit **
Can confirm that Eva's answer works and I no longer have this issue when I turn of automatic syncing on the simulator
The accepted answer doesn't work for me. See my comment there. The problem is with the Handoff.
I had the Handoff option enabled in OS X Settings > General.
After unchecking that option, I have the clipboard synced and no simulator freezes.
Turning off the 'Automatically Sync Pasteboard' option in the Edit menu of the Simulator works for me. I read it in Apple forums
This really helps! Just uncheck the Automatically Sync Pasteboard