Attorneys Of Beckman Schmalzle Georgelas & Ross

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“Hidden” crypto-assets can be found in divorce

On Behalf of | Feb 19, 2022 | Divorce

Cryptocurrency has become one of the biggest sources of conflict in many divorces. Many of those who invested early saw the value of their investment skyrocket. 

The problem is that cryptocurrency by its very nature is anonymous and therefore easy to hide. Even though divorcing spouses are required to disclose all of their assets, some people have tried to hide millions of dollars in Bitcoin and other cryptocurrencies. As one attorney says about hidden assets in a divorce, “Originally, it was under the mattress, and then it was the bank account in the Caymans. Now it’s crypto.”

They’re traceable if you know where to look

Fortunately for people who believe their soon-to-be-exes are failing to report or undervaluing their crypto, it’s become easier to trace and more forensic analysts are able to do so. All transactions are on public ledgers known as blockchains.

Another type of digital asset that’s becoming increasingly popular is the NFT or nonfungible token. Whether you believe they’re a scam or not, the fact is that some people are paying large sums of money for things like digital art, photos, music, collectibles and more. These, too, can be traced via blockchains.

Find out as much as you can before you start talking about divorce

While some of the divorce fights over digital assets that have garnered media attention have involved millions of dollars, your spouse may have considerably less than that. Perhaps the best way to avoid spending money on a forensic professional to trace these assets is to try to find out more about them before you talk about divorce. 

The money to buy crypto has to come from some place. Pay attention to unexplained withdrawals from bank or investment accounts.

Even if you only pretended to listen while your spouse rambled on about their latest NFT purchase before, take an interest – for your own benefit. If you do believe your spouse isn’t being forthcoming about their assets (digital or otherwise) as you divorce, you may want to consider adding someone who can find them to your divorce team.