An American bitcoin entrepreneur could be facing the death penalty after Thailand’s navy accused him of violating the country’s sovereignty by building a “sea home’’ off the coast of Phuket.

Chad Elwartowski and his Thai girlfriend Supranee Thepdet, known as Nadia, have gone into hiding after the Thai authorities said they would take legal action against the pair for building a “seastead” home. The structure is made up of an octagon platform sitting atop a 20 metre long pillar and lies 12 nautical miles from the shore.

However, Elwartowski insisted the house was 13 miles from the shore, and therefore outside of Thailand’s jurisdiction.

Elwartowski and Supranee are pioneers of the “seasteading” movement, which envisages building homes and floating cities in seas outside of national jurisdictions, which are therefore not subject to the laws and taxes of any country.

Elwartowski, who worked as a software engineer for the US military in Afghanistan, Germany and South Korea before accumulating his wealth through investing in cryptocurrency Bitcoin, is part of Ocean Builders, a community of entrepreneurs who aim to build seasteading communities.

He and Supranee were the first volunteers to live on one of the floating structures and in February said he was drawn to the community as a place where “freedom-loving people can all gather together and actually be free together”.

Writing on Facebook on Wednesday Elwartowski said: “Nadia and I are still safe” . However he emphasised they had not built the home themselves and described himself and Suprenee as “tenants”.

“The person(s) who funded the seastead are concerned about losing the seastead but Nadia and I were just tenants,” added Elwartowski. “But as long as Nadia and I are able to live through this that is all that matters to us right now. We just want to live.”

The structure, which was rooted to the floor but could be floated to new waters , was placed in the sea near Racha Yai island in Thailand in February but it was only discovered by Thai navy officers this week. The couple were no aboard at the time.

It led to accusations the couple had “disrespected” Thai law by not seeking permission for the structure. The authorities said they were now considering legal action for a violation of the country’s sovereignty, charges which carry the death penalty.

Thai naval officers and marine police inspect a ‘seastead’ in the Andaman Sea off the coast of Phuket island, southern Thailand. Photograph: Royal Thai Navy Handout/EPA

Ocean Builders and Elwartowski had plans to expand the seastead, which they had called XLII, beyond just the one home. In April, a call was put out for investors to help build another 20 floating seastead homes in the Andaman sea, claiming he had almost 70 interested investors, though the plans have now been paused. The Thai navy said in their statement that these plans amounted to an attempt to build another state in sovereign Thai maritime territory.

“There is evidence showing that they have publicly invited people on social media to stay at the site, which is adjacent to our territorial waters,” said vice admiral Sitthiporn Maskasem, third naval area commander of the area, at a press briefing. “We have laws to deal with this. It affects our sovereignty.”

In his statement on Facebook, Elwartowski expressed concern that Supranee had been driven from her home country and that all their life’s possessions were now under threat. “My biggest worry when they said they demolished it was that all I have is on the seastead,” he said. “It was my home. Being a minimalist I don’t have much but what I care most about in all that I own is my post cards.”

Sitthiporn made it clear on Wednesday that the Thai navy intended to remove the seastead.

“We have already prepared a vessel, equipment and manpower to move the structure,” said Sitthiporn. “We will try to move it within a week.”

