For as long as asset division laws have been in place, people have been trying to get around them. Despite the fact that this is illegal, many feel it is their right or in their best interest to try hiding assets anyway.
To that end, many have utilized cryptocurrency and other means of digital currency to try getting away with this crime. This is why cryptocurrency can prove potentially problematic in divorce situations.
Lack of oversight in crypto
CNBC discusses the use of cryptocurrency in divorce situations. Up until recently, the public at large did not know much about digital wallets. In fact, it was not until this year that the IRS declared cryptocurrency as a taxable form of currency.
Due to the lack of oversight and regulation, many criminals took to digital wallets in order to carry out illicit activities. Money laundering became especially problematic, though smaller scale crimes also happened on a widespread level. This includes asset hiding during divorces.
Many of these spouses relied on their partner’s lack of knowledge about digital wallets, assuming they would not even think to ask questions about their digital currency. At the time, not many divorce attorneys knew about digital currency either, making it easier to get away with this crime.
Awareness increases among the mainstream
But today, many more people know about and understand the prevalence of cryptocurrency. To that end, it is easier to catch onto a person hiding their assets this way. Pay close attention to how paranoid a spouse is about their financial records and digital devices. Note any changes to their spending behaviors as well, such as notable reductions in expenditures.
Combined, these signs may point to an individual trying to hide assets via cryptocurrency.