New York Woman Discovers Husband Hid $500,000 In Bitcoin During Divorce Proceedings (2024)

FAQs

New York Woman Discovers Husband Hid $500,000 In Bitcoin During Divorce Proceedings? ›

After spending half a year on discovery and enlisting the help of a forensic accountant, the New York housewife eventually tracked down 12 bitcoins — then worth half a million dollars — in a previously undisclosed crypto wallet.

Crypto in a High-Net-Worth Divorce

Court orders won't reveal how much crypto a spouse is holding. A court can order banks to reveal how much is in a person's bank account if they are trying to hide assets during divorce, but no single institution is capable of doing the same for crypto.

In a divorce setting, bitcoins are treated as any other asset. If the bitcoin transaction took place during the marriage, it is considered marital property and can therefore be divided.

If you have Cryptocurrency including Bitcoin, Ethereum, etc, and you accumulated these during the marriage, your crypto is generally divided 50/50 between you and your spouse. If you spouse has crypto, you have the right to make a claim against the crypto and in most cases, can obtain 50% of its value.

Search the Residence

Telltale signs of mining activity can be seen by excessive electricity bills, and/or purchasing or acquisition of computer and computer parts. Likewise, “cold storage” of cryptos on hardware or paper can be uncovered by searching secure locations in a home, like a safe or a locked filing cabinet.

Contempt of Court: If a spouse is found to have hidden assets, they may be held in contempt of court. This can result in fines, sanctions, or even jail time. Perjury Charges: If a spouse lies under oath about the existence or value of assets during divorce proceedings, they can face perjury charges.

Contempt of Court: Courts require full disclosure of assets in divorce proceedings. If someone deliberately hides assets, the court could see it as defying a court order, leading to fines or even jail time for contempt.

If your dispute with a cryptocurrency exchange involves the fees charged for a particular transaction and the amount of money at issue is small, small claims court may be your best bet. If you're fighting over a lot of money, arbitration may be your best option.

Yes, investors who have lost cryptocurrency due to fraud or scams may be able to take legal action to recover their funds or seek compensation. However, the process of recovering cryptocurrency through legal action can be complex and challenging.

Technical seizure occurs when the law enforcement agency seizes the bitcoin through a warrant. Bitcoin held in self-custody can also be seized pursuant to a seizure warrant, which must quantify the amount of bitcoin held and the identity of the address owner.

What is the SEC custody rule for crypto? ›

In February 2023, the SEC proposed changes to the “Custody Rule.” The Rule, which has been a key protection in U.S. financial services regulation for decades, requires RIAs to safeguard client funds and securities with a qualified custodian.

Is there a way to tell if a person has cryptocurrency in their account or not? Yes, all records are on the blockchain. If you have their public address, you can verify their balance using a blockchain explorer.

Tracing crypto and other digital assets

Cryptocurrency may appear inaccessible, but there are ways to trace digital transactions. Each crypto transaction is recorded on the blockchain, a shared public ledger that stores data across a network. It may offer clues leading to a spouse's hidden digital assets.

Unlike traditional cryptocurrencies, Monero uses ring signatures, stealth addresses, and confidential transactions to obfuscate the sender, recipient, and transaction amount. This means that transactions made with Monero are virtually untraceable, making it difficult for anyone to uncover your financial activities.

Is cryptocurrency traceable? Yes, contrary to popular belief, most cryptocurrency is traceable with the right tools and expertise.

Cryptocurrency is often used to hide assets because owners and transactions can be hard to trace. Either spouse may use marital funds or assets to obtain cryptocurrency and hide the cryptocurrency until the divorce is finalized.

Cryptocurrency makes things incredibly difficult if your partner chooses not to disclose because it's almost impossible to trace and track. Therefore, the best option may be to try and mediate a solution because the court process can become incredibly expensive.

To disguise the assets' origin, the middlemen moved the assets across addresses they held themselves. Furthermore, they transferred a portion of the assets through newly added bank accounts linked to their exchange accounts so that the crypto assets could be converted into fiat currency.