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DuPage County family law attorneyIf you are like many, you have only recently heard of the term “cryptocurrency” and may be unfamiliar as to what it actually is. Cryptocurrency simply refers to a digital asset which is used as a medium of exchange. The “crypt” part of the word refers to the encryption techniques used to secure the transaction. Cryptocurrencies are becoming increasingly popular because they are difficult to counterfeit and use peer-to-peer, decentralized networks for transactions. Bitcoin is the most popular cryptocurrency but hundreds more, including Litecoin and Ethereum, exist. One of cryptocurrencies’ main appeals is that they can be purchased and sold online. Cryptocurrencies can also be moved offline to a hardware device.

Cryptocurrency Can Be Hard to Value and Track

If you are getting divorced and you or your spouse have invested in cryptocurrency such as Bitcoin, you should know that cryptocurrency is treated like any other asset acquired by spouses during marriage. In Illinois, property accumulated during the marriage is subject to division through equitable distribution. The increase in popularity of cryptocurrencies represents a challenge to divorce attorneys and judges presiding over divorce cases. Unlike other forms of property, there can be serious difficulties tracking and valuing cryptocurrency.

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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.

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