Cryptocurrency has become one of the biggest sources of conflict in many divorces. Many of those who invested early saw the value of their investment skyrocket.  The problem is that cryptocurrency by its very nature is anonymous and therefore easy to hide. Even though divorcing spouses are required to disclose all of their assets, some people have tried to hide millions of dollars in Bitcoin and other cryptocurrencies.

As one attorney says about hidden assets in a divorce, “Originally, it was under the mattress, and then it was the bank account in the Caymans. Now it’s crypto.”

What are “hidden” cryptocurrency assets in the context of divorce?

“Hidden” cryptocurrency assets refer to digital currencies that one spouse may try to conceal during divorce proceedings to prevent their inclusion in the asset division.

Crypto assets are traceable if you know where to look

Fortunately for people who believe their soon-to-be exes are failing to report or undervaluing their crypto, it’s become easier to trace and more forensic analysts are able to do so. All transactions are on public ledgers known as blockchains.

Another type of digital asset that’s becoming increasingly popular is the NFT or nonfungible token. Whether you believe they’re a scam or not, the fact is that some people are paying large sums of money for things like digital art, photos, music, collectibles, and more. These, too, can be traced via blockchains.

If you suspect that your spouse has hidden cryptocurrency assets during a divorce, the first step is to consult with an experienced divorce lawyer. Your lawyer may be able to help you gather evidence to support your claim, including reviewing financial records, subpoenaing cryptocurrency exchanges or other relevant entities, and conducting forensic accounting.

You may also want to consider hiring a digital forensics expert who specializes in uncovering hidden assets in the form of cryptocurrency. These experts can help you locate any cryptocurrency assets that your spouse may be hiding and provide evidence to support your claim in court.

Find out as much as you can before you start talking about divorce

While some of the divorce fights over digital assets that have garnered media attention have involved millions of dollars, your spouse may have considerably less than that. Perhaps the best way to avoid spending money on a forensic professional to trace these assets is to try to find out more about them before you talk about divorce.

The money to buy crypto has to come from someplace. Pay attention to unexplained withdrawals from bank or investment accounts.

Even if you only pretended to listen while your spouse rambled on about their latest NFT purchase before, take an interest – for your own benefit. If you do believe your spouse isn’t being forthcoming about their assets (digital or otherwise) as you divorce, you may want to consider adding someone who can find them to your divorce team.

FAQs About Hidden Crypto Assets in Divorce

Are cryptocurrency assets treated differently from other assets in a divorce?

Cryptocurrency assets are typically treated similarly to other assets during divorce proceedings. They are subject to the same property division rules in the jurisdiction where the divorce takes place.

Can I trace cryptocurrency transactions on my own during a divorce?

Tracing cryptocurrency transactions can be complex and requires specific expertise. Engaging a professional with experience in cryptocurrency forensics is advisable.

How can a forensic accountant or financial expert help with finding hidden cryptocurrency assets?

Forensic accountants and financial experts specialize in analyzing financial records and transactions. They can help trace cryptocurrency assets, uncover hidden accounts, and provide valuable evidence for the divorce case.

What are some preventive measures to ensure transparency with cryptocurrency assets during a divorce?

To ensure transparency, it’s essential to maintain accurate financial records and disclose all cryptocurrency holdings during the divorce process. Open communication and cooperation are key to a fair division of assets.