Relationships are very difficult we all know that. When it comes time for two partners to go their separate ways it can get very messy.
Well splitting assets in the unfortunate event of a breakup has now gone high tech.
Cryptocurrency high tech!
Since it has surged in popularity, it has become far more common for investors to put a lot of their money into cryptocurrency.
Allot of these digital cryptocurrencies like the well-known Bitcoin exist in what is still a mostly unregulated sector.
Couples who have had enough and are seeking to part ways cryptocurrency gives the advantage of hiding assets.
With the way cryptocurrencies work this could result in Adam and Sarah having a tough and lengthy divorce. As lawyers battle it out to prove the others net worth.
The potential of concealing assets during a horrible divorce may raise the eyebrows of government authorities and financial regulators?
Did someone say money laundering?
The Role of Cryptocurrency in Divorces
Virtual money like cryptocurrency is just that virtual. It exists encrypted into a billion pieces on multiple machines through the internet.
Cryptocurrency isn’t as brand new as some people think. It is now over ten years old. The first ever transaction was for a pizza back in 2010.
Who would ever think that all these years later couples would be arguing over who gets the Bitcoin wallet?
Cryptocurrency became well known in the mainstream around 2016 when bitcoin dropped, it rose from 0.44 cent in 2010 to the cost of $10347 in 2022.
That’s a whopping 2351490% increase on your investment in 10 years!
Not only was it a meteoric rise in price, but also a meteoric rise in public attention.
It was covered by all major news outlets and cryptocurrency became thought of as the next big thing. Lots of stories circulated of people becoming incredibly rich.
Imagine telling that to a worker struggling to make ends meet. It caused a gold rush type frenzy.
Of course, what goes up can also go down, the Bitcoin price fluctuates greatly. Don’t believe all the rich quick stories you read.
In 2016, just 5% of the world held cryptocurrency, according to an international poll.
This rose to 12% in 2022.
Since cryptocurrency has grown in popularity, law professionals all around the world have started to come across divorce cases with high value electronic asset disputes. Disputes containing cryptocurrency assets.
Roy Simon, a big apple-primarily based matrimonial law legal professional, represents all special forms of divorce cases often bringing up cryptocurrency as a part of a dispute.
Roy asks all his customers to complete a statement of net value.
A document of net value is a detailed document detailing income, debt and belongings of every notary in the document.
Cryptocurrency is an obvious place to hide wealth.
” We ask people to declare all electronic assets upfront. Otherwise if we find something during our investigations, we could use that against the other person.” Says Roy.
I Want Half Even Everything That’s Virtual
Everyone thinks that cryptocurrencies are super encoded with a code that is impossible to crack making cryptocurrencies 100% anonymous.
An ideal place to hide away funds like 18th century pirate burying treasure.
This is not always true, however.
In one divorce case, a husband did not report $400,000 he had in cryptocurrency resources on his statement of net value during the case.
Andrew Blumer of fintech education website comparebrokers.co warns. “Due to the technology used as the backbone of cryptocurrency these things can become very complex, very quickly.”
“As people become more educated in crypto, there will be an increased instance of people trying to conceal their resources”, explains Andrew.
If an individual accepts bitcoin as payment or trade. As the cryptocurrency networks have no regulation and are not monitored there is essentially no accessible evidence of this exchange happening.
You cannot go to court without real proof. which makes exposing digital assets even more challenging to show to the courtroom.
“It is quite tough to trace when someone knows what they are doing” says Andrew.
“A specialist will know not to leave signs on their pc, and it may be more challenging requiring a subpoena.”
The Future of Spouses Hiding Money in Cryptocurrency
In the next few decades hiding assets electronically will only increase as technology gets more advanced.
It is only natural with some divorce laws that state your spouse is entitled to half that divorcees with substantial amounts of cash to turn toward cryptocurrency for a means to conceal their resources from them soon to be ex-partners.
This will be across the board irrespective of class race and wealth.
“Industry is slow to keep up with Cryptocurrency uptake” says Andrew.
“You just have to look at who sits on your local government, a number of them are over 65. No disrespect but how can someone in their 60’s have any clue how cryptocurrency works?
They do not even understand what Tik Tok is. This is a generational gap of knowledge.
How the Finance and Legal Industries are Adjusting to this Rising Trend
As attention continues to shine on cryptocurrency, legal experts will need to immediately educate themselves to stay ahead or at least level with this currency.
For the time being there isn’t enough time invested to educate and inform law officials on the internal workings of cryptocurrency.
Most of what legal professionals understand about crypto is self-taught.
“I believe there needs to be more cryptocurrency training” says Andrew.
“Some aspects of cryptocurrency are rather complex, and that may be even more difficult for someone without a history in technology”, says Andrew.
Cryptocurrency Divorces Can Get Pricey
Most of the lawyers are not experts in this field.
Complex cases involving detailed cryptocurrency assets may be drawn out and convoluted.
Lawyers are already expensive but to get a professional expert to work on a crypto case may mean many hours.
This will inevitably lead to a high invoice for the divorcee.
The average lawyer can cost between $100 – $500 an hour!
So, when it finally comes time to go your separate ways in a divorce, partners may now be handing each other USB sticks with cryptocurrency as well as home furnishings.