Digital currencies or cryptocurrency have been around since 2009, with Bitcoin being the most popular of a pool that includes thousands of others. While they have surged in popularity, critics worry about the unregulated nature of these markets. Essentially cash stored in the digital format that lives online and is traded on an encrypted blockchain, the concept is a simple one that can nonetheless be challenging to value or divide during divorce, and very tempting to use for hiding money.
Not so fast
Many family law attorneys are asking about cryptocurrency when listing assets. Regardless of the answers, it is still possible to analyze bank statements trace transactions through crypto-trading platforms. This can be done with help from a digital forensic expert, although it does take time and will likely be expensive.
Spouses who suspect financial infidelity can also look for more conventional clues. This can include paperwork with references to cryptocurrency (look for password-like strings of alphanumeric characters). Physical evidence may be flash-drives, external hard drives or offline backup wallets like Cryptosteel, which is a small titanium box that contains passwords, wallet recovery seeds and private keys.
Holding them accountable
Spouses concerned that a husband or wife is hiding money using cryptocurrency should discuss it with their family law attorney early in the divorce process. They can then determine a course of action that holds the spouse accountable. Ideally, the conversation with the other side or potential action by the court will be enough to deter any temptation, but an attorney can address the matter if necessary.
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