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Using Cryptocurrency to Hide Assets

Posted on in High Asset Divorce

TX divorce lawyerCryptocurrency, or virtual currency, has existed in one form or another since 2009, but has become a much more mainstream investment over the last few years. While it is true that investing in cryptocurrency can be a lucrative endeavor, it can also make for a difficult and lengthy property division process for couples who later decide to divorce. For instance, it is becoming increasingly common for one spouse to use cryptocurrency as a means of hiding assets from the other during the divorce process.

Fortunately, there are ways to prevent this type of behavior, which is unlawful under Texas law, so if you and your spouse have decided to file for divorce and you have questions or concerns about how your marital assets will be divided, you should strongly consider contacting an experienced high asset divorce lawyer who can ensure that you reach a fair and equitable settlement.

Tracing Cryptocurrency

As stated earlier, cryptocurrency is virtual currency that exists only online and is traced on an encrypted ledger that details all transactions. Unfortunately, it is the very nature of cryptocurrency that makes it an ideal means of hiding assets, as it tends to be difficult to trace and hard to value. Divorcing spouses are required to disclose all of their assets and liabilities at the outset of proceedings and while many are forthright in these disclosures, some are not so scrupulous. Cryptocurrency is the perfect vehicle for many of those who fall under the latter category.

Fortunately, it is possible for divorcing spouses to trace cryptocurrency transactions and so uncover when one or the other is attempting to hide assets, especially in cases where the currencies were traded using an online exchange or were purchased with funds from a bank account. It is when cryptocurrency is moved offline, which could take the form of transfer to a USB device, that tracing these assets becomes much more difficult. In these cases, the suspicious spouse should consider hiring a digital forensics expert who can help determine whether the transactions actually took place.

Valuing Cryptocurrency

Even when one person is not trying to hide cryptocurrency during a divorce, appraising this type of asset comes with its own unique challenges, as cryptocurrency has proven extremely volatile when it comes to placing value. In fact, it is not uncommon for the value of a cryptocurrency asset to fluctuate by thousands of dollars over the course of the divorce proceedings themselves. Because valuing cryptocurrency is much more difficult than placing a price on ordinary investments, couples must usually conduct valuations at every step in the proceedings before agreeing on a value at the final hearing. In an effort to work around this, many divorcing couples choose to simply divide their cryptocurrency assets down the middle, a result that is usually deemed equitable by the courts.

Contact Our Legal Team Today

To start working on your own case with a dedicated Cedar Park high asset divorce lawyer, please call Powers and Kerr, PLLC at 512-610-6199 today. We are eager to assist you throughout each step of your case.

 

Sources:

https://www.bankrate.com/personal-finance/divorce-cases-cryptocurrency-assets-new-battleground-bitcoin/

http://fortune.com/2018/02/26/bitcoin-divorce/

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