Could Cryptocurrency Affect My High Asset Divorce?

Anyone who has followed technology and financial news over the past few years is likely familiar with cryptocurrency, i.e. digital money which is encrypted to generate units of currency and verify the transfer of funds without operating through a central bank. Yet for individuals entering high net worth divorces, cryptocurrency is quickly moving away from being an exciting possibility of the future into a very real complication today.

While reports indicate that only around 5% of Americans held cryptocurrency as of 2018, statistics also indicate that it’s becoming an increasingly popular option for diversifying assets among the wealthy. However, the fact that cryptocurrency is unregulated, encrypted, and independent of a central bank makes it very difficult to verify the exact amount of crypto assets one has, and therefore, very difficult to divide those assets. There’s a growing fear among many that cryptocurrency will also be used to hide hidden funds that one spouse does not want to share with the other in a settlement agreement.

Mark DiMichael, a CPA, certified Financial Forensics account, and fraud examiner who specializes in cryptocurrency recently discussed this with Bankrate. “It’s really hard to trace if the individual knows what they’re doing,” DiMichael warns, “An expert is going to know not to leave any evidence on their computer, and it can be much more difficult to subpoena.” DiMichael also stated that he himself once discovered a husband hiding $100,000 in crypto during a divorce.

It’s important to consider the fact that cryptocurrency is notoriously volatile as well. Until this growing market is more stable, it will remain difficult to divide these assets, as they may be extremely valuable one day and ostensibly worthless the next. ¬†

On top of all this, because there are no specific laws governing cryptocurrency right now, it’s very difficult to establish what digital assets one spouse owes another, if any, in a divorce. While forms of electronic cash like bitcoin are likely to be regulated at some point in the future, that still leaves couples where one spouse has a significant amount of assets in cryptocurrency in a difficult situation today.

The specter of cryptocurrency remains largely unknown to most attorneys. This is why it is more important now than ever to hire divorce lawyers who are technologically savvy, and able to adapt with the changing times to protect your assets.

For Henderson high asset divorce attorneys that know how to employ modern strategies and the latest legal techniques on your behalf, contact Ford & Friedman today. We handle a wide range of complex divorce matters, including independent valuation of business and real estate holdings, analyses of estate plans, nuptial agreements, and financial accounts, and liquidation of assets. Ensure that you receive everything you are owed in your divorce, with the experienced divorce lawyers at Ford & Friedman.

Call (702) 904-9898 to gets started on your case, or click here to fill out our information form online.

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