Using Cryptocurrency to Hide Assets in a Texas Divorce

 Posted on September 03, 2022 in Complex Divorce

What was once just a hobby for a few has turned into a significant form of investment for many. It is estimated that more than 20 million people in this country own cryptocurrency. The value of the cryptocurrency market hit an all-time high of $2 trillion in April, an obvious boom for anyone who owns crypto assets. But this popularity of cryptocurrency has also created a way for some spouses to hide assets in a divorce.

How Is Cryptocurrency Treated in a Texas Divorce?

Cryptocurrency is considered a marital asset, just like funds in financial accounts, stocks, bonds, 401(k) accounts, and IRAs. Since Texas is a community property state – meaning the marital estate is divided in half in a divorce – the value of any crypto assets the couple owns is also required to be split between the couple.

In situations where one spouse purchased crypto assets prior to the marriage, the growth in those assets may be deemed a marital asset depending on how the couple approached this growth. For example, if both spouses worked together in making decisions in purchases, investing, etc., during the marriage, then the court could rule that profits made during the marriage are not separate belonging to the spouse who purchased the original assets, but are instead marital assets.

Hiding Crypto Assets

Because crypto assets are anonymous assets, they are becoming a more common method for people who seek to hide marital assets from their spouses in order to keep that spouse from receiving their fair share of the marital estate. If it is suspected a spouse is hiding assets in a crypto wallet, there are some steps that can be taken by a divorce attorney.

In addition to working with a forensic accountant who specializes in tracking hidden assets, the attorney can request a court order that compels the suspected spouse to turn over computer records and any accounts associated with cryptocurrency. In order to obtain that court order, however, the attorney must have evidence of suspected hidden asset activity.

Contact a Travis County Complex Divorce Attorney Today

If you are considering a divorce and suspect your spouse may have been or will try to hide assets from you, contact Powers and Kerr, PLLC to find out how we can help. We will work diligently to make sure you get your fair share of the marital estate. Call 512-610-6199 to schedule a confidential consultation with one of our dedicated Austin, TX high asset divorce attorneys.

Sources:

https://www.cnbc.com/2021/06/01/divorcing-spouses-are-using-cryptocurrency-to-hide-money-how-experts-find-it.html

https://www.cnbc.com/2021/04/06/cryptocurrency-market-cap-tops-2-trillion-for-the-first-time.html