Bowden Cyr, PLLC - Attorneys At Law

Cryptocurrencies may be the future of spouses hiding money

Minnesota residents going through the divorce process are starting to see the role that cryptocurrencies play. Cryptocurrencies are virtual currencies that were introduced in 2009 with Bitcoin. The currency itself lives online and is traded on a blockchain. A blockchain is an encrypted ledger designed to detail different transactions.

It is common for those who invest in cryptocurrencies to have shares in unregulated markets. This increases the challenges that divorcing couples face when attempting to identify the value of and divide cryptocurrency assets. Because of this challenge, divorces involving cryptocurrency may take longer and can be more expensive.

The largely unregulated nature and the encrypted nature of cryptocurrencies make them a potentially perfect place for spouses to anonymously hide funds. This doesn't mean that cryptocurrency is perfect in this regard. There's a relatively popular case that took place recently where a husband did not want to report more than $100,000 in cryptocurrency assets when he laid out his statement of worth at the start of the divorce process. During discovery, financial forensics accountants were able to look through the husband's bank statements and use those to identify cryptocurrency transactions.

However, the more knowledgeable individual is about cryptocurrencies, the more complicated they can make it for attorneys or accountants to find those hidden assets. For example, if a cryptocurrency transaction took place in person where an individual exchanged cash for Bitcoin, there would be no proof that the transaction happened. This would make asset hiding a lot easier for the spouse and a lot harder to prove or to reveal in court.

If an individual believes that their soon-to-be ex-spouse is hiding wealth in cryptocurrencies, they might wish to discuss the issue with a family law attorney. A family law attorney may be able to provide assistance to the client by explaining some of the laws and regulations connected to determining the value of assets, dividing assets, addressing joint debt, and dealing with joint property during the divorce procedure.

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Bowden Cyr, PLLC - Attorneys At Law

7825 3rd Street North | Suite 204 | Oakdale, MN 55128 | Phone: 612-254-6409 | Fax: 651-731-5496 | Oakdale Law Office Map