Bitcoin and Seizure: Can the Tax Office Access My Wallet?

Whether a bitcoin seizure succeeds depends on where your coins are. If they sit on an exchange, the German tax office can seize them without going to court: it sends the exchange a garnishment order, and from then on you can no longer withdraw. If they sit in your own wallet, nobody gets at them without your key. But that does not protect you: you must list your bitcoin in a declaration of assets, and hiding them is a crime in Germany, Austria and Switzerland. Enforcement only happens for a debt that is due and that you have not paid.

How bitcoin are taxed is explained in Bitcoin taxes in Germany. This article is about what comes after: there is a tax assessment or another debt, it is due, and it has not been paid.

When the tax office enforces at all

A seizure does not come out of the blue. In Germany the Fiscal Code (AO) requires three things: an assessment with a demand for payment, the due date and a one-week wait afterwards (§ 254 AO). Usually a reminder comes first. From the due date, late-payment surcharges of 1% of the debt accrue for every month or part of a month (§ 240 AO).

Unlike a private creditor, the tax office needs no court judgment and no bailiff. The tax assessment is itself the enforceable title, and the tax office's enforcement unit carries out the seizure itself. That makes it fast: a few weeks can lie between the due date and the seizure.

Seizure at the exchange: how it works

To the tax office, an exchange account is a claim you have against the exchange: to pay out your euros and to hand over your bitcoin. Such claims can be seized.

• Euro balance on the exchange is a monetary claim. The tax office seizes it with a garnishment and collection order under § 309 AO, exactly like a bank account.
• Bitcoin on the exchange are not a monetary claim but a claim to a transfer. Tax offices then base the seizure on the rules for other property rights (§ 321 AO). Which provision fits best is not fully settled in the legal literature; it makes little difference to the outcome.

The order goes to the exchange as the third-party debtor. From delivery, the exchange may no longer pay out to you and you may no longer dispose of the balance. The exchange must tell the tax office within two weeks whether and what it holds for you (third-party debtor's declaration, § 316 AO). The tax office then realises the assets, in practice usually by selling the coins and transferring the proceeds.

How the tax office learns about your account

There are three usual routes. First, your own statements, for example in your tax return or declaration of assets. Second, reports: since 2026 crypto providers in the EU record your transactions under DAC8 and report them to tax authorities from 2027 (see DAC8 and CARF). Third, information requests to providers, which the tax office can make in individual cases. An account at an EU exchange will hardly stay unknown for long.

Your own wallet: no access, but a duty to disclose

If your bitcoin sit on a hardware wallet and only you know the seed, the tax office cannot simply debit them. There is no one it could send an order to. But it does not follow that self-custody protects you from seizure.

The declaration of assets. If enforcement fails, the tax office can require you to submit a list of all your assets (§ 284 AO; for private creditors § 802c of the Code of Civil Procedure, via the bailiff). Bitcoin belong on it, with amount and location, even if they are on a hardware wallet. At the end you affirm in lieu of oath that the information is correct and complete.

What happens if you refuse. Anyone who refuses the declaration without reason can be detained to enforce it, for up to six months (§ 284(8) AO). They are also entered in the debtors' register, which makes credit, a tenancy and a phone contract harder to get.

What happens if you lie. A false or incomplete affirmation in lieu of oath is a criminal offence under § 156 of the German Criminal Code: up to three years in prison or a fine. Negligence is punishable too (§ 161). Moving bitcoin out of reach once enforcement looms, for example to a friend's wallet, additionally risks prosecution for frustrating enforcement (§ 288). And bitcoin leave traces: an earlier withdrawal from an exchange to your wallet is stored there for years (see Travel rule).

Stricter still in insolvency

In insolvency proceedings the debtor must give the administrator all information and actively cooperate (§ 97 of the Insolvency Code). Anyone who hides bitcoin generally loses the chance of a discharge of residual debt (§ 290) and risks prosecution for bankruptcy offences (§ 283 of the Criminal Code). In practice, administrators who find signs of bitcoin demand a transfer to a wallet they control.

Private creditors, criminal cases: different routes, same logic

A private creditor, such as a landlord or a bank, first needs an enforceable title, meaning a judgment or an enforcement order. The enforcement court then seizes your exchange account with a garnishment and transfer order (§§ 829, 835, 857 of the Code of Civil Procedure), and the bailiff takes the declaration of assets. The penalties for false statements are the same.

Criminal proceedings are separate. If bitcoin come from a crime, prosecutors can secure and confiscate them (§§ 73 et seq. of the Criminal Code, § 111b of the Code of Criminal Procedure). The best-known example: in 2024 the state of Saxony sold around 50’000 BTC from the case of the Movie2k platform, which a suspect had transferred voluntarily. That has nothing to do with the tax debts of an ordinary saver.

Austria: tax enforcement and the list of assets

In Austria the tax office enforces tax debts itself under the Tax Enforcement Act (AbgEO), again without a court. It seizes a balance at an exchange as a claim by prohibiting the exchange, as third-party debtor, from paying you. Private creditors go through the district court under the Enforcement Act (EO).

In Austria the duty to disclose is called the list of assets (Vermögensverzeichnis, § 47 EO). Bitcoin belong on it. Anyone who submits a false or incomplete list and thereby endangers a creditor commits an offence under § 292a of the Austrian Criminal Code. Anyone who deliberately moves assets away to harm creditors additionally risks a penalty under § 156 (fraudulent insolvency).

How bitcoin are taxed in Austria, and so which tax can become a debt in the first place, is covered in Bitcoin taxes in Austria.

Switzerland: debt enforcement under the SchKG

Switzerland has no separate tax enforcement. The tax administration, like any other creditor, has to start debt enforcement proceedings under the Federal Act on Debt Enforcement and Bankruptcy (SchKG). The steps:

1. Payment order from the debt enforcement office. You have ten days to file an objection.
2. Setting aside the objection. A final tax assessment counts as a judgment here, so the tax authority moves on quickly.
3. Seizure (Art. 89 et seq. SchKG). The enforcement officer records what you own.

At the seizure you must disclose all assets, including those held for you by third parties (Art. 91 SchKG). Third parties such as banks and crypto providers are also obliged to provide information. Anyone who hides or moves assets away commits seizure fraud under Art. 163 of the Swiss Criminal Code, punishable by up to five years in prison. Anyone who simply fails to cooperate with the seizure risks a fine under Art. 323.

How bitcoin are taxed as wealth in Switzerland is covered in Bitcoin taxes in Switzerland.

What this means for self-custodians

Self-custody protects you from losses through an exchange failure and from a provider freezing your coins. It is not a tool against legitimate creditors. Anyone who tries that trades a tax debt for a criminal case.

In practice:

• Declare your taxes honestly. Most seizures involving bitcoin start with undeclared gains. How to report them is covered in Reporting bitcoin gains to the tax office.
• Plan cash for taxes. If you know a tax bill is coming, set the amount aside in euros or francs instead of having to sell at a bad price when it is due.
• Talk early. Applying for instalments costs a letter. A seizure costs surcharges, fees and your choice of when to sell.
• Inform your heirs. Heirs are also liable for the deceased's tax debts. An executor should know whether unpaid assessments exist (see Bitcoin executor).