Dealing With Cryptocurrency in a Divorce
Cryptocurrency is a type of digital currency. It uses a ledger with strong cryptography (secure information and communication techniques) to keep online transactions secure. Cryptocurrency can be used to purchase services or goods, or to trade for profit.
Bitcoin, the most popular cryptocurrency, reached a price of nearly $65,000 in April 2021, lost nearly half its value in May 2021, then went back up in value to approximately $45,000 in recent weeks, as reported on NerdWallet. With the rise in popularity of cryptocurrency in recent years, it has become the latest method for divorcing spouses to hide assets.
How Do Indiana Property Division Laws Apply to Cryptocurrency?
Under Indiana law, equitable property division occurs in a divorce. This means marital property is divided in a way that is fair to both parties, but not necessarily equal. The first steps are to determine which is separate property, not subject to division in a divorce, and to compile a complete list of all the marital assets and debts, including their value. Next, divorcing spouses can reach an agreement on how to divide marital property, or the court will decide for them. Cryptocurrency acquired by either spouse during the marriage should be subject to equitable property division, but the nature of digital currency makes it easier to hide than other assets.
What Makes Finding Hidden Cryptocurrency a Challenge in a Divorce?
Some spouses use cryptocurrency in an attempt to hide money in a divorce. If you suspect this is the case, it is important to speak with experienced Indianapolis divorce attorneys. It can be a challenge to track down hidden digital currency because it cannot be traced to a particular individual without a private key – a password held by the individual owner. Cryptocurrency is not tied to any bank, brokerage, or government, and is not subject to regulations, fees, or third-party interference. Records cannot be requested from any financial institution unless the owner chooses to use an exchange to hold the currency.
What Steps Can Your Attorney Take to Identify, Value, and Divide These Assets?
The first challenge is to determine whether your spouse has made a cryptocurrency investment. This may be based on clues such as past conversations with your spouse about cryptocurrency, or changes in your spouse’s lifestyle, such as large purchases or extra cash. If you suspect your spouse has a significant amount of hidden cryptocurrency, our Indianapolis divorce lawyers can file a subpoena to gain access to your spouse’s computer and electronic devices. We can also use forensic experts to:
- Search electronically stored information for currency ticker symbols
- Search devices for login credentials
- Look for confirmation emails from exchanges
- Check bank statements for transfer activity
- Check past loan applications for cryptocurrency listed as an asset
Why Is It Important to Disclose All Your Assets in a Divorce?
In an Indiana divorce, both spouses are required to disclose all their assets. When both parties are open, honest, and thorough in their disclosure, divorce will go faster and cost less. If the court discovers that a spouse has been attempting to hide assets, there may be penalties, including a smaller portion of the marital property and possibly criminal charges.
At Emerson Law LLC, our Indianapolis divorce attorneys have been rated 10.0 Superb on Avvo, listed among Indiana Super Lawyers®, and named among the National Trial Lawyers Top 100 Trial Lawyers. We take an aggressive and progressive approach to divorce. Our goal is to protect your interests while helping you achieve your objectives. Call us at (317) 969-8000 if you are facing divorce and suspect your spouse is hiding cryptocurrency assets.
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