Divorce is complicated enough to get through, without the addition of digital technologies that you may not even have heard of, let alone understand. The fact of the matter is that the use of cryptocurrencies such as Bitcoin is at an all-time high. Even if you are unaware of them, it doesn’t mean that your spouse hasn’t invested or transferred assets into a digital currency. Because this is a relatively new technology (only having been introduced in 2008), many lawyers, judges, and judicial systems haven’t caught up. This means that cryptocurrency has become a fairly effective way of hiding assets during a divorce. For this reason, it’s important to take preemptive actions and be thorough in attempting to identify any existing digital currency assets. One of the best ways to do this is by retaining a lawyer who is experienced in cryptocurrency divorce litigation and who is licensed in Colorado. The experienced Denver hidden asset attorneys at Halligan LLC can help you with the prospect of hidden assets like digital currency. Because most people aren’t overly familiar with cryptocurrency, it is not something that they are used to having to look for and it is easy to overlook possible signs that it might exist. This can make it possible for one spouse to transfer large sums of money (or small sums over a long period of time) into digital currency, using currency exchanges and other methods. In the same way that a spouse may attempt to sell expensive assets, such as a prized automobile or valuable artwork or jewelry to a friend for a suspiciously low price (often with the agreement that they will purchase it back after the divorce is finalized), cryptocurrency can be a way of depleting marital assets in order to reduce the amount of marital property that may be divided and shared with their spouse. This can be particularly high stakes in Colorado, as it is an equitable distribution state, which means that in many cases, one spouse may be entitled to receive more than 50% of the marital property.How is Cryptocurrency Used to Hide Assets?
Signs Your Spouse May Be Using Bitcoin to Conceal Marital Assets
As with any divorce, it’s important to look for signs of concealment. For example, the easiest way to start, particularly if you have permission to access your spouse’s digital devices, or if you share a phone plan, is to see if any crypto apps or crypto exchange apps have been downloaded on any digital devices to which you have been granted permission to access. Any secrecy around bank statements, or learning that your spouse has a secret account to which you do not have access, can also be red flags. The attorneys at Halligan LLC are skilled in reviewing financial disclosures to find signs of concealment and in locating assets. Once the divorce is filed and the spouses have exchanged mandatory financial disclosures, your legal team at Halligan LLC will review all tax returns to see if your spouse has reported any capital gains or losses associated with the ownership of Bitcoin or another cryptocurrency; however, if your spouse is trying to conceal assets, it is unlikely that they would have declared the crypto assets on their taxes. We will also review all banking and financial statements for any inconsistencies, such as frequent withdrawals, purchases made at cryptocurrency exchanges, wire transfers, and a suspicious amount of Amazon purchases.
Cryptocurrency Apps to Look For:
- Binance
- BlockFi
- Robinhood Crypto
- Tradestation Crypto
- Webull Crypto
- FTX.US
Cryptocurrency Exchanges to Look Out For on Bank Statements:
- Coinbase
- FTX2
- CoinbaseExchange3
- PaxForex
- Kraken
- KuCoin
- Coin switch
- Luno
- Gate.io
- Huobi Global
- Binance
Look Out for Amazon Purchases
Cryptocurrency exchanges are only one way of obtaining Bitcoin and other cryptocurrencies. Users of Bitcoin have a digital wallet into which their bitcoins are transferred. Users can purchase these bitcoins by transferring USD or other currencies, or they can be transferred to them by other cryptocurrency holders. If someone is trying to conceal their use of bitcoin, they will likely be careful not to leave any trace of it on their financial statements. Instead, they can find another cryptocurrency holder in a chatroom or exchange and purchase that user's items off of Amazon. The user will, in exchange, transfer the appropriate amount of bitcoin or cryptocurrency into their wallet. For this reason, a large number of Amazon purchases showing up on someone’s bank statement may be an indication that they have been exchanging Amazon products (purchased with marital assets) for the stealth transfer of Bitcoin into their digital wallet.
What to Do Next
You should hire an attorney to represent you in any divorce, but especially one involving cryptocurrency. After investigating and reviewing financial documents, your divorce attorney may advise you to hire a forensic accountant to dig deeper and look for any other signs of concealment. It should be noted that even if you do not find any indications of cryptocurrency usage, your lawyer can still take precautions throughout the divorce proceedings. For instance, during discovery, your spouse may be required to provide copies of all financial records - going back years -, including any records of cryptocurrency transfers. If your spouse fails to produce these records, they can face legal consequences. It is important for your lawyer to request possible cryptocurrency usage, and for this reason, having an attorney who is informed about the usage of cryptocurrency and has experience uncovering it during a divorce is critical.
Contact the Experienced Colorado Cryptocurrency and Divorce Lawyers at Halligan LLC
If you are going through a Colorado divorce, it’s essential to have dedicated and experienced legal advocates on your side. Today it is critical that your attorney is versed in cryptocurrency in order to ensure that you get a divorce settlement that considers all marital assets. This is not possible unless all marital assets can be identified and accounted for.
Contact a Denver hidden asset lawyer at Halligan LLC today by calling 720-608-2361 to schedule a confidential consultation where you can start taking steps toward your best possible divorce settlement and a new life.
