Could Your Spouse be Hiding Money in Bitcoin Purchases?

 Posted on August 20,2014 in Complex Divorce

Often in complex divorces, one spouse attempts to hide income and assets from the other spouse in order to avoid a fair and equitable marital estate settlement. There are several ways this can be done, including transferring assets to separate accounts or put them in a friend's name, delaying payments of commissions or bonuses, not billing clients or creating phony expenses (in a business) and overpaying the IRS.

However, there is a new way for spouses to hide money, and it can be almost impossible to trace. Bitcoin is a new, digital currency that was invented in 2009. The currency does not use banks and there is no government involvement or oversight. There are no fees and users can remain anonymous. In fact, even the person who invented Bitcoin is anonymous. He is only known by his alias of Satoshi Nakamoto.

Some refer to this as the "currency of the Internet." Bitcoins are sold at a rate predetermined by a computer program. That computer program created nearly eleven million Bitcoins. People can buy or sell Bitcoins, and they are then stored in a "wallet" kept on a digital cloud. Transactions are made from the wallet, with no way of tracking those transactions.

During a complex divorce, spouses are required to produce financial affidavits that list all income and expenses, as well as assets. If a spouse has purchased Bitcoins, this should be listed as an asset. However, if a spouse is trying to hide money from the other spouse, not declaring Bitcoins is an almost untraceable way to do it.

Although finding Bitcoins once they have been purchased may be almost impossible, it may not be possible to track those purchases. Look for multiple transfers from bank accounts of money for which your spouse cannot account.

An increasing number of merchants are accepting Bitcoins as forms of payment. If your spouse owns a business, he or she could accept payments in Bitcoins which would be almost impossible for you to track since these transactions require no invoices. One way to prove that your spouse is hiding money in Bitcoin assets in their business is having acquaintances purchase product from your spouse's business and see if those purchases turn up in copies of their business financials that your high-asset divorce attorney can request.

If you are considering a divorce where there will be complex custody or high asset issues, it is critical to contact an aggressive Cedar Park complex divorce attorney to begin planning and strategizing to ensure you receive all that you are entitled to in your divorce settlement.