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Can The IRS Seize Your Bitcoin?Bitcoin seizure is the process by which the government legally dispossesses a citizen of bitcoin. � Bitcoin is seizure-resistant and can only be seized by. The federal government can use administrative forfeiture to take almost anything, aside from real estate and property valued at more than. In most cases, the only way to seize and confiscate cryptocurrency coins is to identify a password (known as a �private key�) and transfer the coins to the law.