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When one spouse hides marital income by buying cryptocurrency

On Behalf of | Jul 10, 2023 | Divorce

Splitting up marital property can often be the biggest challenge that a divorcing couple is compelled to grapple with. Couples may disagree about what assets are subject to division and also what their belongings are actually worth. Sometimes, one spouse is so eager to maximize what they receive in the divorce that they lie about their financial circumstances and intentionally hide property from their spouse and the courts during the discovery process.

This process has long involved someone physically moving assets, withdrawing money from joint accounts for personal savings or even starting hidden bank accounts. One of the more common ways that people hide assets in modern divorces involves purchasing cryptocurrency like Bitcoin. Experts estimate that roughly one in five Americans has some amount of cryptocurrency holdings.

What can someone do if they believe their spouse may have purchased and hidden cryptocurrency in an effort to secure an unfair divorce settlement?

They will likely need professional help

A few years ago, there were only a handful of digital currencies, but now there are thousands. That makes it almost impossible for an individual without support to effectively check for a spouse’s cryptocurrency holdings. After all, the research process often involves reviewing extensive blockchain records. People may hold cryptocurrency online in a digital wallet or may have an offline storage system that may utilize a thumb drive or similar storage device. There may be digital records on household devices or financial records of purchases in bank accounts that forensic accountants and other specialists can use to unearth cryptocurrency assets.

In some cases, the holdings that someone has hidden from their spouse could be worth hundreds of thousands of dollars and could substantially increase the overall value of the marital estate. Those with complex estates, especially if they have a tech-savvy spouse who is always eager to try out the newest investments, may need to worry about the possibility of hidden cryptocurrency impacting the property division process.

Those who can uncover hidden assets may be able to convince the courts to divide them and possibly penalize the spouse who tried to hide them. Understanding the different places where spouses often hide marital resources could help those attempting to locate all shared assets in anticipation of a potentially contentious divorce.