When dealing with divorce, one of the biggest and messiest parts will likely come in the form of asset division. This often takes up a lot of time and money, causing both parties stress in the process.
Of course, things get even more complicated if one spouse attempts to hide assets. This is why spouses should keep an eye on their partner’s digital wallet during the divorce process.
The abuse of cryptocurrency
CNBC discusses the use of cryptocurrency during divorces. Until recently, not even the IRS kept a close eye on digital currency transactions. In fact, it was not until this fiscal year that the IRS deemed cryptocurrency as taxable income.
Due to its low-profile nature, many people took advantage of cryptocurrency as a chance to get away with illegal activities such as money laundering or fraud schemes. Of course, spouses wanting to hide assets during a divorce also turned to cryptocurrency, knowing that not many people even knew that it existed, let alone what it allowed.
How does it work?
In essence, a person trying to hide assets via cryptocurrency did so by exchanging their real-world cash into digital tokens, which represent a certain sum of money per token. Once the divorce gets finalized, they could then sell those tokens and get their real-world money back.
However, as cryptocurrency came to the attention of the mainstream, fewer people could get away with hiding digital assets so seamlessly. Keep an eye out for unusual behavior that might indicate a spouse hiding assets in their digital wallet, such as protectiveness over financial information or the use of personal electronic devices.