Divorce Proceedings and Crypto Can Be a Hard Combo
As more and more cryptocurrencies are bought by young married couples in America, the idea of splitting that crypto up can be rather difficult should that couple ever find themselves in divorce court – especially if one of those individuals tries to hide their finances behind a blockchain façade.
During divorce proceedings, trying to work things out so items like stocks, houses and even time with pets are split evenly can result in some stressful moments, but according to divorce lawyer and author Sandra Radna, crypto tends to bring the stress level to a whole new level.
In a recent interview, she states that one of the most important things to know is if a crypto purchase was made before the marriage began or after. She comments:
If you do not know for sure, it may be enough to suspect crypto assets if there is a smaller amount of assets than expected when the income of the parties is high.
She says that the attorney for a specific party would likely have to have the same knowledge as a tax accountant or computer specialist, and they would need to know what information to target and which outlets to turn to. She mentions:
For example, the attorney can secure the computer hard drive, bank and credit card statements, tax returns, loan applications and request paper wallets, software wallets and hardware wallets, all of which may contain proof of crypto investments and assets through the court system. The divorce attorney may also subpoena exchanges – such as Coinbase or Binance – if the exchange is based in the U.S.
One Can Hide Their Money in Crypto
Kelly Burris – senior litigation partner at Cordell & Cordell – claims that it would be easy to hide one’s finances in crypto given how few people truly understand how digital assets work. She says:
It is certainly possible and easier to hide investments in cryptocurrency than it is almost any other type of financial investment save cash or some other type of physical, easily concealable asset. Exchanges do not usually provide any kind of financial statements, and coins or tokens are easily moved and held outside of exchanges. Furthermore, cryptocurrency can be extremely difficult to value due to the volatility of the market. For example, bitcoin recently took a nosedive and in less than a one-month period, dropped in value over $29,000. That can have a severe impact on the division of a marital estate in a divorce.
Howard Dvorkin – a certified public accountant – offered some positive insight regarding the situation and said that money, while complicated, can always be appropriately divided, whereas who gets custody of children and similar circumstances can be extremely rough to handle.