Bitcoins and hidden assets: what you need to know before divorce
When most people think of a couple going through a high-asset divorce, the thought of one spouse hiding assets usually comes to mind. As we have stated before, in a matter of a few discussions with a family law judge, a high-asset individual can see their wealth shrink quickly, leaving them with less than what they had been used to for all those years. Hiding assets may appear to offer a way to protect the wealth a high-asset spouse may feel they are entitled to.
Hiding assets is against the law here in Maryland, though, meaning any spouse who chooses to hide assets during divorce proceedings could face serious legal consequences as a result.
In the past, hiding assets typically left a paper trail allowing forensic accountants the opportunity to uncover the assets and return them to the marital fund for distribution between spouses. Nowadays, tightfisted spouses are looking to other ways of hiding assets–ways that are not as easy to track down.
Take for example the use of bitcoins to hide marital assets. Typically, “no personal information is collected about parties to bitcoin transactions,” explains a Business Journals article, which makes individual transactions difficult to link back to a specific individual. Transactions also do not go through any banking institutions, making them even more difficult to track down.
This does not mean that transactions are untraceable, however. Bitcoin transfers are “publicly viewable using blockchain explorers.” You simply have to know how to use the explorers and know what you’re looking for in order to track down a transaction that could indicate the hiding of marital assets.
Because of the newness of bitcoins and their complexity, spouses seeking to uncover hidden assets should not trust their own ability but rather the ability of someone like a forensic accountant. Forensic accountants are much more equipped to uncover hidden assets because they know where to look and how to find missing assets with relative ease.
