Cryptocurrency Fraud In Divorce

Do you want to hide assets from your spouse? One way to do that is to divest your assets into a form that is harder to track down. Cryptocurrency is held in digital wallets which can be accessed by forensic accountants. Still, the money won’t show up in a bank account or be obviously attached to the individual’s estate. Most investments aren’t like this. However, cryptocurrency provides a layer of anonymity that most investors don’t require. Nonetheless, the layer of anonymity can be very useful for certain things.

Crypto complicates divorces 

Some spouses, knowing that crypto is useful for certain ends, can divest cash accounts or other assets and transfer them into cryptocurrency. Cryptocurrency is harder to track down than other types of investments. Attorneys will know that you have a stock portfolio or a retirement fund. They will need to suspect that you are hiding assets before they can get a subpoena for your personal laptops or access to crypto accounts.

Is cryptocurrency traceable? 

Yes, but it depends on the cryptocurrency. The Bitcoin blockchain is completely accessible to every user on the blockchain, and thus transactions can be traced. Newer cryptocurrencies have attempted to get around this problem by hiding their blockchain from crypto holders. In addition, governments are implementing KYC rules to break up money laundering rings and fake accounts set up for the purposes of welfare and public services fraud.

So yes, Bitcoin and other popular cryptocurrencies are 100% traceable unless they employ a hidden ledger.

The problem for spouses 

Forensic accountants cost a lot of money, so before a spouse pulls the trigger on making that expenditure, they’ll need to know that their spouse is hiding a significant amount of money. Otherwise, they could end up spending $20,000 on a forensic accountant who uncovers $300 in DogeCoin. The financial constraints of paying for a forensic accountant drive up the requirements for attorneys to consider the venture worthwhile.

Divorce is expensive, so spending money during divorce is a red flag 

If your spouse has chosen now to make a new luxury purchase, pay off debts, or be generous with family members, then you should be thinking that there is some form of fraud going on. There may not be, but you should assume there is for the purpose of investigating. If money is being depleted from bank accounts and major expenditures are being made, then chances are good that something funny is happening.

If your spouse made most of the financial decisions, then you’ll need to rely on your attorney to ensure that you are being compensated fairly.

Talk to a Pennsylvania Divorce Attorney Today 

Philadelphia family lawyer Lauren H. Kane represents the interests of Pennsylvania residents seeking divorce. Call today to schedule an appointment and we can begin discussing your goals immediately.