Divorcing spouses hiding money in cryptocurrency
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Divorcing spouses hiding money in cryptocurrency

| Jun 9, 2021 | divorce

Over 20 million people in this country own cryptocurrency and the digital currency market values rose to a record $2 trillion in April. This trend has encouraged some spouses to conceal their digital assets during divorce proceedings.

Signs

Determining whether a soon-to-be former spouse made a cryptocurrency or other investment is the most difficult task. This is followed by going after that asset once that suspicion is confirmed.

A spouse often learns about cryptocurrency from conversations with their soon-to-be former spouse. Money missing from joint checking accounts and lifestyle changes are also suspicious. Their spouse, for example, may suddenly have extra cash or purchase an expensive item such as a new car.

Accessing accounts

An attorney may file a subpoena or seek a court order to get access to a spouse’s computer or electronic devices if a spouse believes there is a large amount of undisclosed cryptocurrency. Attorneys can request access if a spouse is aware of a special cryptocurrency account.

Forensic experts may comb through electronically stored information for digital currency ticker symbols. They can also search devices for login credentials.

Confirmation emails from exchanges or transfer activity bank statements are other sources of information. In some cases, cryptocurrency income was reported on earlier tax returns or listed on loan applications.

Obstacles

Bitcoin and ethereum may be easier to find. But monero, dash, PIVX. Verge, horizon, grin, and other anonymous cryptocurrency are difficult to track.

Foreign cryptocurrency exchanges may also pose serious obstacles. Attorneys can usually subpoena U.S.-based exchanges, but it can be difficult to obtain records from foreign companies.

These inquires may also be expensive. Forensic experts charge hourly, and their fees may be expensive depending on the number of electronic devices and amount of information they must review. Reviewing and acting on this information may also add to legal costs.

Spouses should consider the costs involved before beginning this search and determine whether the amount of suspected cryptocurrency justifies the cost of searching for it. These investigations may be justified if there is a substantial amount of cryptocurrency.

Prepare

Even if there is no cryptocurrency, spouses should begin collecting information and calculate marital assets before starting their divorce. In addition to cryptocurrency, missing money may also be a sign of a gambling problem, offshore bank accounts, an extramarital affair or that spouse having another family.

Attorneys can assist spouses with looking for hidden assets. They can also help protect their rights in proceedings and negotiations.