Washington residents understand that property division can be one of the most contentious parts of any divorce. When there are many assets at stake, people may be motivated to try and hide some of them and avoid sharing with their estranged spouse. One way that wealthy people are starting to do that is with cryptocurrency.
Hiding assets with crypto
A high-asset divorce can be contentious, and sometimes one spouse will hide resources in a crypto account. Cryptocurrencies are a new kind of asset. Crypto like bitcoin has been used for everything from investments to standard currency functions like making purchases. Crypto is not a currency issued by a government, like the dollar. That is part of why it fluctuates so wildly at times. Until recently, crypto accounts also weren’t tracked by agencies like the IRS. So that made it a good way to launder money, purchase illegal goods and hide assets.
Statistics show that over 20 million people in the U.S. own at least some cryptocurrency. This demonstrates that while it’s becoming more popular, it’s not really common yet. Less than 10% of the population has started using it. When a spouse decides to try and hide assets in a crypto account, it can be difficult for attorneys or their investigators to find it. That’s particularly true for the new cryptocurrencies that are always emerging.
How crypto is structured
Cryptocurrency is actually designed to be traceable. In fact, the blockchain underpinning it was originally an innovation developed for the credit card industry. Crypto transactions are secure in part because of blockchain technology. Each trade, purchase or transaction is recorded in a little “block.” Each packet of this information is encrypted and hard to hack into.
While it is possible to track down assets hidden in crypto accounts, it can be incredibly expensive to do so. Before searching for assets in hidden crypto accounts, consider how likely it is that they exist. Will the benefits of finding an account outweigh the cost? Unfortunately, it’s not always worth the expense.