Last week we discussed Bitcoin and other cryptocurrencies in general, focusing on what they are and their ever-increasing usage by consumers to buy merchandise and by merchants to get paid. We also discussed how digital currencies are used extensively for darker purposes, such as to launder money or hide assets, often during a divorce. This week we delve deeper into this aspect of Bitcoin.
As a family law attorney, you should be aware that nearly everything having to do with Bitcoin and other digital currencies is done online. You also need to be aware, and may be shocked to discover, that many websites, usually under the rubric of “men’s rights” actively encourage husbands to use Bitcoin, et al. precisely for the purpose of hiding assets from their wives before or during a divorce.
Buying Bitcoin is easy, quick and anonymous. Hiding it; i.e., storing it once you have it, likewise is exceptionally easy. All you need is a “wallet,” or several of them if you wish to transfer Bitcoin back and forth among them, including out of the country. A wallet is a virtual electronic storage place located on your computer, external hard drive, thumb drive, smartphone, or in the cloud. You can also have an online wallet at the company where you buy your Bitcoin.
Naturally, you have to convert dollars into Bitcoin one way or another. When looking for hidden assets, look for bank account cash or ATM withdrawals. Also look for bank, Western Union, credit/debit card or other transfers made to any places containing the word “coin” in their name. In addition, look for long weird strings of numerals and letters such as 1F5tAaz5x1HUXrCTLbtMDqcw6o5GNn4xqX embedded in a husband’s emails, texts, or computer files. These signify a wallet, or more precisely, a wallet “address.”
Buying Bitcoin with Cash
Once you have a wallet, buying Bitcoin or other cryptocurrencies is more or less anonymous. Usually buyers buy from an online exchange like one of the following:
- Wall of Coins
Once on the exchange’s site, you select a seller and agree on a price. He sends you his bank account number; you send him your wallet address. You go to a nearby branch of his bank, make a cash deposit into his account, get a receipt, and upload it to him. That’s it. The seller deposits your Bitcoin into your wallet, usually within two hours and often within 15 minutes. There is a transfer fee involved.
LibertyX works somewhat differently. Here you can buy up to $1,000 worth of Bitcoin per day at a variety of retail stores. As with the other exchanges, there is a transfer fee, but if you sign up with Facebook, your first $1,000 purchase is free.
LocalBitcoins is an exchange site that works differently yet. Here you have the option of making a cash deposit into the seller’s bank account or meeting the seller in person to make the exchange.
Believe it or not, there actually are Bitcoin ATMs located across the country. Their fees are somewhat higher than dealing directly with an exchange.
Other Purchase Methods
You can also buy and sell Bitcoin and other digital currencies online at such websites as CoinBase using your bank account number or a debit or credit card. In addition, you can purchase Bitcoin via your PayPal account. Again you need to go through an exchange, but you can make a direct trade or do something called a “Bitcoin loan” whereby Bitcoin owners “lend” their cryptocurrency to you, the PayPal buyer. You then pay the loan balance via PayPal.
Should you wish to begin accepting Bitcoin in payment of your legal fees, all you need is a Bitcoin merchant account which you can set up at a number of payment processing providers including bitpay, coinify and bitcoinpa.
For more information on additional financial issues you need to be aware of, how gaining your Certified Financial Litigator credential will give you the financial knowledge and skills you need to attract additional high-asset clients, and the other benefits of AACFL membership, please visit this page on our site.