Cryptocurrency has become one of the most popular ways to invest and store wealth, with millions of people across the world buying and trading digital currencies on a daily basis. But with the rise in popularity of cryptocurrencies has come a new problem – hidden crypto holdings in divorce cases.
As more people get married and start families, the issue of hidden assets has become a major concern for divorce attorneys. In the past, most people hid assets like cash, stocks, and bonds in offshore accounts or in hidden bank accounts. But now, with the growing popularity of cryptocurrencies, people are using digital currencies to hide their wealth from their spouses.
So why do people hide their crypto holdings during a divorce?
One of the biggest reasons people hide their crypto assets is to avoid having to divide them with their partner. In a divorce, the assets are usually divided between the two parties, but if one person can hide their crypto holdings, they can keep that money for themselves. Another reason is to avoid paying taxes on the profits they made from trading cryptocurrencies.
However, hiding crypto assets is not as easy as it sounds. Cryptocurrencies are stored in digital wallets that can be traced back to the owner. While it is possible to create anonymous wallets, it is still difficult to completely hide the transactions that take place on these wallets.
For divorce attorneys, tackling hidden crypto holdings has become a new challenge. They must have a deep understanding of blockchain technology and the different kinds of cryptocurrencies in order to trace and uncover hidden assets. This means a lawyer must be able to recognize the different types of wallets and be able to track down the assets stored in them, even if they are hidden behind layers of encryption.
One of the most important things attorneys can do when dealing with hidden crypto holdings is to conduct a thorough financial investigation. This means looking for any signs of hidden assets or suspicious activity, including large transactions or transfers of cryptocurrencies to offshore wallets.
Attorneys can also work with forensic accountants who specialize in tracking and analyzing cryptocurrency transactions. These experts can help attorneys trace any cryptocurrency transactions to specific individuals or entities.
Another important tool for attorneys dealing with hidden crypto holdings is the subpoena. A subpoena is a legal order that requires someone to produce documents or provide testimony under oath. Attorneys can use a subpoena to demand that cryptocurrency exchanges provide information about their clients’ transactions or to force individuals to reveal any hidden wallets or assets.
Hidden crypto holdings have turned divorce battles into high-stakes cases, with millions of dollars at stake. As the use of cryptocurrencies continues to grow, it is likely that we will see more cases of hidden crypto assets in divorce cases. Attorneys must be prepared to tackle this new challenge by staying up-to-date with the latest technologies and strategies for uncovering hidden assets.
In conclusion, hidden crypto holdings are becoming an increasingly common challenge for divorce attorneys. With millions of dollars at stake, it is more important than ever to conduct thorough financial investigations and stay up-to-date with the latest techniques for tracking and analyzing cryptocurrency transactions. By staying ahead of the curve, attorneys can help their clients win the settlements they deserve, and ensure that justice is served in divorce cases involving hidden crypto assets.
The rising popularity of cryptocurrencies as investment assets has introduced a new source of conflict in divorce cases. Hidden digital assets are a growing concern, leading to turmoil within divorce proceedings.
Divorce attorneys and financial advisors are now confronted with complex situations arising from financial deception related to undisclosed cryptocurrency holdings, CNBC reported on May 20. The scenario is particularly prominent in states like Florida, Texas, New York, and California, where cryptocurrencies play a significant percentage of divorce cases, ranging from 20% to 50%.
Interestingly, attorneys and advisors are discovering cases where one spouse secretly invests substantial amounts, ranging from hundreds of thousands to millions of dollars, in cryptocurrencies without their partner’s knowledge. Some tactics involved include dispersing crypto across various coins on different blockchains and complicating tracing money trails.
For instance, in one case, a woman uncovered her ex-husband’s undisclosed crypto wallet holding 12 Bitcoins, valued at approximately $500,000 at the time. Forensic investigators specializing in cryptocurrency tracing have emerged as a new profession amidst the hunt for hidden crypto assets during divorces.
However, tracking hidden crypto assets has become increasingly complex as hunters face challenges stemming from cryptocurrencies’ decentralized and unregulated nature. Obtaining subpoenaed information related to these assets is often difficult due to the absence of centralized regulation. Divorce attorney Kelly Burris stated, “The thing with cryptocurrency is it’s not regulated by any kind of centralized bank, so usually you can’t subpoena somebody and get documents and information related to somebody’s cryptocurrency holdings.”
At the same time, the valuation and division of marital assets are also significant challenges when spouses include metaverse properties and non-fungible tokens (NFTs) in their crypto portfolio. The clandestine presence of cryptocurrencies in divorce cases presents unique challenges, testing legal and financial experts’ expertise.
In conclusion, the rising popularity of cryptocurrencies as investment assets has introduced a unique struggle in divorce cases, where one spouse may secretly invest substantial amounts in digital assets without their partner’s knowledge. Due to the decentralized and unregulated nature of cryptocurrencies, tracking hidden assets has become increasingly complex, and obtaining information related to these assets is often difficult due to the absence of centralized regulation. The clandestine presence of cryptocurrencies in divorces tests the expertise of legal and financial experts and presents a significant challenge for the valuation and division of marital assets.
