We talked last week about the Panama Papers and how they show evidence of hidden assets in divorce. This week, we’d like to look at another target for hiding marital property ”“ cryptocurrencies, of which bitcoin is the most popular.
Bitcoin is a type of digital currency, created and held electronically. Bitcoin is decentralized, meaning no bank controls the value ”“ the value is generated via computers solving mathematical problems. It’s cheap, easy, anonymous and transparent ”“ and, in many ways, can be helpful for the shady spouse looking to hide money in divorce.
There are several ways to trace hidden assets through paper trails and digital data. But when you introduce the ability to easily hide money overseas in cryptocurrency, you might have to get creative to prove that there is money being hidden.
There are many other ways that bitcoins can be made difficult or impossible to find, and many excuses that could be used. One could claim that the private key that denotes ownership and value of the bitcoins has been lost. If a freezing order is placed on the bitcoins, they can still potentially be trafficked through the Dark Web, given that no centralized service controls the movement of bitcoins.
Bitcoin is not entirely untraceable, though it is harder to do than to follow a paper trail. There are services called blockchain explorers that can allow you to identify suspicious transactions that might indicate money is being hidden. However, given that bitcoin is still in its infancy, the chances of the average divorcee knowing how to use blockchain explorers is not likely. In these cases, you might be best off hiring a forensic accountant to help.
Our Denver divorce attorneys work with a variety of experts to ensure that your property is divided equitably during divorce.
