For years, divorcing spouses have used different tactics to hide assets, preventing them from being subject to property division. Examples of such tactics include overpaying creditors or the Internal Revenue Service (IRS), purchasing expensive items and giving expensive gifts. In recent years, the use of cryptocurrency to hide assets during divorce has gained popularity.
Here is what to know about this tactic:
It’s anonymous
The transactions of cryptocurrencies do not require the approval of a third party like a bank. Users have random pseudonyms that they use to move transactions, which means their real names are unknown. However, other users on the platform can see transaction details, although even this is becoming harder as some digital platforms have enhanced their anonymity features to hide transaction details.
The anonymity quality of cryptocurrency makes it one of the leading ways to hide money during divorce.
Can you uncover it?
Despite cryptocurrency being anonymous, you might still be able to tell if your spouse is using it to hide money. Firstly, you should be concerned if the list of assets your spouse presents during your divorce does not add up. Raise the matter if you notice a suspicious aspect in their income or bank accounts.
A forensic accountant can help uncover your spouse’s money in cryptocurrency. They can do this by examining their electronic devices following an order from the court. From your spouse’s electronic devices, the forensic accountant can find statements related to digital wallets and transaction details. Bank statements showing transactions from the bank to digital wallets can also serve as crucial pieces of evidence.
Further, having encrypted messaging apps, password managers or virtual private networks (VPNs) can be proof of concealed cryptocurrencies.
Although widely considered anonymous, cryptocurrency transactions can be uncovered. If you believe your soon-to-be ex-spouse is hiding assets, obtain more information on how to approach the matter.
