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How does digital currency factor into divorce?

On Behalf of | Apr 11, 2022 | Blog, Family Law

When going through a divorce, it is important to prepare for the asset division. This often serves as one of the lengthiest parts of the process, giving all participants a major headache.

Many people will try to take the confusion of this step as a way to get away with hiding assets, however. They may also rely on digital currency to do so.

The use of cryptocurrency in crime

CNBC discusses the way divorcees have used cryptocurrency in recent years. Divorcees have many reasons to want to hide assets from their spouses. This can range from simply wishing to spite their significant other, to feeling genuinely financially unstable and wanting to hold on to an extra share of finances. But no matter the reason for it, it is still illegal and the potential repercussions if one is caught are heavy.

In order to avoid these repercussions, those who hide assets will do so in as careful a way as possible, trying to raise as few red flags and leave a small or even nonexistent trail for investigators to follow.

This is where cryptocurrency and digital wallets come in. Until recently, the mainstream’s attention did not focus on cryptocurrency. Because of that, many people got away with hiding their assets in their digital wallets, completely escaping the notice of attorneys and investigators alike.

Induction into the mainstream’s awareness

However, cryptocurrency recently entered mainstream awareness. With the IRS deciding that digital currency like bitcoin is taxable, more people have shone a light on digital wallet spaces. This makes it harder than ever for spouses to hide their assets digitally without leaving some kind of trail.