How divorcees are using bitcoin to cheat their ex-spouses

On behalf of Barli & Associates LLC posted in divorce on Thursday, January 11, 2018.

The world has been getting more excited than ever about the technology behind bitcoin — especially because the price of one bitcoin has skyrocketed over the last year. Bitcoin, among hundreds of other “cryptocurrencies,” is a new kind of currency that doesn’t involve banks, and holders of these currencies don’t even need identities; they just need a digital “wallet” to hold their crypto coins inside.

Cryptocurrencies are completely secret, so a soon-to-be ex-spouse could secretly buy cryptocurrencies, put them in a secret digital wallet and no one would be the wiser. This is why cryptocurrencies are creating a new kind of challenge for divorcing spouses, their attorneys, police and the court system during asset division. Even if a spouse suspects this his or her husband has a digital wallet with cryptocurrencies inside it, authorities wouldn’t have any way of finding it, let alone prying it open to extract the digital coins for the purposes of dividing a marital estate.

All that said, spouses may have ways to track down digital currencies that a spouse is trying to hide. For example, many people buy digital currencies via one of the many digital currency exchanges that require an identity to register with. This might be one way to track down the information. Once a spouse can show that his or her ex has been hiding money during a divorce, a New Jersey court is sure to take action to punish that spouse. Courts often give favor to the honest spouse in cases where one spouse is hiding money or assets from the other.

Source: Bloomberg News, “Bitcoin the New Mattress Full of Cash for Divorce Cheats,” David McAfee, Dec. 28, 2017