Spouses sometimes hide assets during divorce for numerous reasons. Some may not feel like their ex-spouse “deserves” any of their money. Others may have a genuine fear of financial instability in the aftermath of a split.
Whatever the case, however, this is an illegal move. Anyone hiding their assets could end up facing serious legal repercussions. This includes those who try to hide their assets digitally.
What is attractive about digital assets?
CNBC discusses cryptocurrency and hidden assets in divorce and the relationship between the two. In recent years, cryptocurrency has gained more popularity without actually breaking into the consciousness of the mainstream. Even the IRS and other tax revenue services and systems did not pay cryptocurrency much mind, as it was not until this year that the IRS deemed it taxable income.
Because of this, it served as an excellent place for people who wanted to make financial moves without leaving behind much of a trail, paper or digital. For example, cryptocurrency became a hotbed for people who wanted to launder their money. Divorcees wanting a safe place to hide assets also turned to digital wallets.
The process of hiding assets in digital wallets is similar to any other process where money is transformed into another asset. In this case, the money transforms into digital tokens like bitcoin, which an individual can then hold onto until they decide they want to cash it back out.
Fortunately, with the uptick in global awareness of digital currency, more professionals like divorce attorneys know to keep an eye out for it. Thus, a spouse is much less likely to get away with hiding assets in this case.