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Bitcoin and Divorce

Posted on in Division of Assets

bitcoin, hidden assets, Naperville divorce attorneyDivorces can become ugly, and all too often spouses attempt to hide assets from each other. People going through a divorce should be cautious, and ensure they have a clear picture of their shared finances, so they know what they are entitled to from their divorce settlement. Some divorcing individuals will go to great lengths to hide money or other assets from their spouse. They open new bank accounts, hide money with friends, go on spending sprees, or avoid disclosing retirement and other investment accounts, to name just a few possibilities. Now, experts are worried about another potential way spouses could hide money from each other. Bitcoin, a new high-tech form of digital currency, is difficult to track and regulate, making it an attractive option for those wishing to hide money from their spouse.

Bitcoin, created in 2008, is a digital currency accessible from anywhere in the world. It is not restricted by any government, does not rely on any bank, and gives it’s users the option to remain anonymous. Since it’s creation, the currency has grown tremendously. One 2013 report showed the total number of Bitcoins around the world to be valued at over 10 billion US dollars. In 2015, the currency is still growing, and more vendors around the world are starting to accept it. Governments across the globe are struggling with regulating Bitcoin. Since it allows users to store money and purchase goods anonymously from anywhere in the world, states and countries are unable to tax or control the currency.

Thanks to the anonymity it provides, marriage experts are worried Bitcoin could be used by spouses wishing to hide money from each other during a divorce. Most states require both parties disclose their assets during a divorce. This includes bank accounts, stocks, cash, vehicles, real estate, and more. Bitcoins would fall under this as well, so legally, both parties would be required to disclose any Bitcoins they possessed. Unfortunately, experts fear that if a person is attempting to hide money from their spouse, they would likely not be afraid to do so illegally. Additionally, because Bitcoins are so hard to track, once a spouse converts funds into Bitcoin, it is unlikely they will get caught.

While funds are hard to track once they are converted into Bitcoin, the conversion process does leave clues. If you are worried your spouse may be using Bitcoin to hide assets from you, examine all of your shared accounts, and look for any trace of transfers to Bitcoin. If you do notice funds transferred into Bitcoins, your best plan of action is to show the court that your shared marital property was converted into Bitcoins that you do no longer have access to. Hopefully, the court can compel your spouse into revealing the true amount of Bitcoins they possess.

As governments around the world attempt to regulate Bitcoins, you too should use caution. If you notice any suspicious transfers, notify your attorney immediately. Remember, once funds are transferred into Bitcoins they become much more difficult to track, so your best defense is a good offense. Educate yourself on your shared finances, so you will be able to identify if assets go missing. The goal here is not to cause your soon to be ex pain, or send them to jail, but rather to even the playing field so both of you receive what you are entitled to.

If you are facing a divorce, having the help of a qualified Naperville divorce attorney is crucial. Contact the Pesce Law Group, P.C. at 630-352-2240 to consult with an attorney today. Our skilled team has handled a wide variety of divorce related cases, and is available to assist you with yours.

Sources:

http://money.cnn.com/infographic/technology/what-is-bitcoin/

http://www.dailyfinance.com/2014/06/16/bitcoin-high-tech-way-hide-assets-divorce/

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