Hiding Assets in a Divorce With Cryptocurrency

Hiding Assets in a Divorce With Cryptocurrency

In a divorce, both parties are expected to be honest about their assets. This is because assets acquired during a divorce are subject to division in a divorce.

However, hiding assets is something that has been happening forever. Out of revenge, some people try to hide money, bank accounts, and other assets so that their spouses cannot get a piece of them in a divorce. Nowadays, people are going a step further and hiding assets using Bitcoin and other forms of cryptocurrency.

Many people are using cryptocurrency because it is hard to trace. It is not like depositing cash into an account or writing a check. You do not get a receipt when you use it and websites do not keep records of it, which is why many people use cryptocurrency to buy illegal stuff online, such as drugs and child pornography.

It is estimated that more than 20 million Americans own cryptocurrency. With Bitcoin soaring past $60,000 earlier this year and digital currency values spiking to $2 trillion in April, people who own cryptocurrency often do not want to part with it. They think they can easily hide it, but that is not entirely the case. While it is difficult to uncover, it is not entirely impossible.

While cryptocurrency has been around for many years and has likely been involved in numerous divorces, lawyers are just starting to become more aware of them. They are starting to learn more about the challenges involved.

How is Cryptocurrency Discovered?

Lawyers do not automatically look for evidence of cryptocurrency, since the discovery process can be quite expensive. Instead, they go off hunches. If they become suspicious, then they will look for investments. Past conversations between the spouses about cryptocurrency or a sudden lifestyle change, such as new cars or other high-value purchases, can arouse suspicion.
If an attorney believes there is evidence of cryptocurrency investments, they may file a subpoena so they can access the other spouse’s electronic devices. They can also hire forensic experts to search these devices for login credentials or look for any stored information about cryptocurrency. They can also check bank statements and tax returns to look for activity or records of income related to cryptocurrency.

Difficult and Expensive to Track

While there are ways to locate cryptocurrency activity, it is still fairly hard to discover. Plus, it can be expensive to do so. Bitcoin is one of the easiest forms of cryptocurrency to track, but forms such as dash, zcash, monero, and horizon are much more difficult because they are even more anonymous. Plus, it is easier to deal with exchanges that are based in the United States. A lawyer can subpoena them to get information. This is harder when the exchange is based in a foreign country.
A cryptocurrency investigation is also costly. Forensic experts charge by the hour, and if there is a lot of information and devices to go through, this can take a while. Plus, if anything is found, the lawyer then needs to spend time reviewing it. Therefore, you need to consider the cost and how much money you expect to find. Six figures or more? Definitely worth it. A few thousand dollars? You might want to pass.

What Happens if I Hide Assets in a Divorce?

While anything you bring into a marriage will likely remain as your separate property and is not subject to split in a divorce, anything acquired once you say “I do” is fair game. Instead of trying to be spiteful and thinking about how you can get more and make sure the other party gets less, aim to be 100% transparent with your assets. It will be more beneficial for you in the long run.

If you try to hide your assets, it will be discovered somehow. A lawyer for either party can hire a forensic investigator or other financial expert to uncover the assets. They have many methods for doing so, so do not think you will be able to get away with your crime.

If you fill out or submit incorrect documentation, fail to disclose your assets, or intentionally try to hide them, you could face criminal charges. Perjury and contempt of court are two of the most common charges you could face. In extreme cases, you could pay fines and legal fees or be forced to spend time in jail.

In addition, hiding assets is considered highly unethical by the court. Judges will use this information to make their own decisions about asset division and other elements. For example, Florida operates under equitable distribution laws, which allows for the fair distribution of assets. If you attempt to hide assets, your ex-spouse will likely benefit from your dishonesty, receiving a higher percentage of assets.

Therefore, hiding assets is a risky proposition and never worth it. Be honest and upfront with what you have. By communicating with your ex-spouse and discussing the situation with your lawyer, you can increase the chances of your assets getting split fairly.

Seek Legal Help

Hiding assets is not only unethical but illegal. Your spouse is entitled to their share of assets acquired during a marriage, no matter where you live. Do not try to hide them and make things more complicated.

If you are ready to divorce and are concerned about hidden assets, contact Broward County divorce attorney Scott J. Stadler. We can use financial experts to investigate and uncover the assets. Schedule a consultation today by filling out the online form or calling (954) 346-6464.