A new way to hide assets in divorce: Cryptocurrency

| Jun 14, 2021 | Family Law

Though Bitcoin has taken investors on a rollercoaster ride of dizzying heights and abrupt declines, it has overall substantially increased in value over the past few years. At the beginning of 2017, it hovered around $1,000. By the end of the year it had soared to slightly more than $20,000.

In the first quarter of this year, it again took flight, blowing past $63,000, but has since fallen to around $38,000.

The rise-fall-rise patterns of Bitcoin and other cryptocurrencies – Ethereum, Stellar, Dogecoin, Tether, etc. – are of special interest to those who are going through a divorce or expect to divorce in the near future and suspect that their spouse is trying to hide assets so that they won’t be divided in a property settlement.

Illicit trends

Because cryptocurrency exists only online and is secured with encryption, it has become popular for use in illegal activities such as money laundering, weapons sales and drug trafficking.

It should be noted that in Georgia, people filing for divorce must make full asset disclosures on financial affidavits. False statements on the documents or false testimony in court can result in penalties for perjury, including fines and being required to pay the other party’s lawyer fees.

Cashing in

Some people know from conversations that their spouse has invested in digital currency, while others notice changes in their spouse’s spending that arouse suspicions.

Cryptocurrency can be used to buy expensive cars, real estate, gold, trips and more, all of which might indicate that a spouse has cashed in gains made in crypto.

Tracking down hidden crypto

CNBC reports that experts have “several ways to find secret cryptocurrency accounts”:

  • Examine electronic data for crypto ticker symbols
  • Search electronic devices for exchange login credentials
  • Check for confirmation emails from crypto exchanges
  • Examine bank and credit card statements for transfer activity
  • Check past tax returns and loan applications

While a family law attorney can subpoena U.S.-based crypto exchanges, it can be difficult to get information from exchanges based overseas.

Perhaps the best approach for a resident of Evans or nearby communities is to speak with an experienced family law attorney who can assess your situation and then protect your rights and interests at every step through the legal system.