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How does cryptocurrency factor into asset hiding?

On Behalf of | Mar 11, 2022 | Divorce |

It is not a new tactic for a spouse to attempt to hide assets during divorce. In fact, this has happened essentially as long as laws about property division have been in play.

But with the constantly changing digital and technological landscape, many people have turned to new methods of attempting to hide assets that might be harder for everyone to detect and trace.

Hiding assets in cryptocurrency

CNBC covers the increase in spouses attempting to hide assets via cryptocurrency. Digital currency, in general, has maintained a relatively low profile over the years, only coming into the spotlight and the general public’s conscious thought in recent years.

Because of this, it creates a perfect place for people to do illicit and illegal financial activities. For example, many have turned to digital currency as a way to launder money. People attempting to hide assets during a divorce also turn to the protection they get in the lack of tracking and oversight of digital currency.

It is harder even for forensic financial analysts to trace the purchase, spending and saving of these digital tokens at times. People who understand and know this will use the system to their advantage.

Identifying red flags

However, it is possible to detect potential red flags even in the face of this form of asset hiding. First, the person hiding assets will likely change their spending habits, either saving an unusual amount or seemingly spending more than usual. They will often also grow much more protective of their digital devices and financial information.

Anyone who notices suspicious behavior that may point to a spouse trying to hide assets should bring up the possibility with their legal team to see what they should do next.