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How does cryptocurrency come into divorce?

On Behalf of | Aug 3, 2022 | Divorce

Going through a divorce is difficult for any couple. The most difficult part for many is the division of assets. This can stir bitter feelings and may even result in one person trying to hide assets.

But how does asset hiding actually work? More importantly, how does digital asset hiding work in the current day?

Understanding digital currency

CNBC discusses the use of cryptocurrency in divorce situations. Generally speaking, cryptocurrency has not enjoyed popularity in the mainstream for many years. It is only recently that more people are even aware of it, with the IRS not taxing digital currency until the year 2021.

Because of that, many people used it in the past as a place to hide assets during divorce. They knew that most people would not even think to look at a digital wallet and that many did not even know what one was. Thus, they would hide assets by purchasing bitcoin or another cryptocurrency with the intent to transfer it back later or to simply let it grow without alerting their spouse.

The decline of digital asset hiding

However, as more people grow aware of bitcoin and other digital currencies, it has gotten harder and harder for people to attempt to hide their assets in this way.

On top of that, even digital methods of asset hiding still count as asset hiding in the eye of the law. This means that people caught doing this still face the same consequences, and any assets found can still end up divided in the same way under a judge. This is good news for any spouse that someone attempted to trick through asset hiding in the first place.