What Do Cryptocurrencies Have to Do With Divorce?
This article looks at how Bitcoins are increasingly being used to hide assets during divorce.
The dramatic rise in the value of Bitcoins and other cryptocurrencies in 2017 has made headlines across the world. While such cryptocurrencies may not seem to have anything to do with divorce and family law, as The Daily Beast reports, they are quickly becoming a new vehicle for hiding assets from ex-spouses during divorce negotiations. Below is a look at how cryptocurrencies are being used to hide assets and what other common methods of hiding assets during a divorce are.Hiding Assets in Bitcoins
Bitcoin is a digital cryptocurrency, meaning that it can only be bought and sold online. It is highly unregulated and has not been adopted as an official currency by any government in the world. However, excitement about it potentially becoming a legitimate currency in the future, along with its underlying "blockchain" technology, has led to its value skyrocketing in 2017, from about $1,000 at the beginning of the year to about $19,000 as of mid-December.
What makes Bitcoin important in terms of hidden assets in divorce is that because the cryptocurrency is so unregulated, owners of Bitcoins can remain largely anonymous. That has made Bitcoin up to now especially popular for money laundering and other criminal enterprises, but it could also make it lucrative for ex-spouses who want a place to hide their cash from an ex-spouse. The temptation to do so may be even higher now given that Bitcoin is entering the mainstream and has risen so quickly in value. As Forbes points out, the more wealth is at stake in a divorce, the more likely one of the spouses will attempt to hide assets.Other Places to Hide Assets
Cryptocurrencies may be the newest place to hide assets, but they are, of course, not the only place. A similar, if more low tech, method of hiding assets is to buy art, antiques, or collectibles that are both hard-to-value and easy to hide. Alternatively, many ex-spouses who try to hide assets will "gift" a major asset to a friend or relative, with the understanding that the asset will be returned after the divorce is finalized.
For business owners who are going through a divorce, it can be especially tempting to use the business as a vehicle for hiding assets. This can be achieved by inflating business expenses, underreporting income, or taking on cash jobs that go unreported to the IRS.Hunting for Hidden Assets
While the way assets are hidden in divorce may have changed, what has not changed is the fact that anybody going through a divorce has a right to know exactly how large their marital estate actually is. A family law attorney can help clients in the midst of a divorce fight for a fair settlement, including by helping them uncover whatever assets they suspect a former spouse may be hiding.