The slow but steady popularization of digital assets is starting to have a notable effect on divorce law in the United States. Once a rarity during the property division process, cryptocurrencies have become a fairly normal subject as spouses split their assets in the best way possible. For attorneys who have never dealt with this situation before, this can seem like a bit of a headache. However, many divorce lawyers across the United States are now becoming quite experienced with crypto and all of the nuances that it brings.
Sometimes, the best way to learn about dividing crypto is simply by “doing.” The truth is that many divorce attorneys are figuring things out as they go along, and often this is the only way to discover the various limitations and possibilities when it comes to splitting Bitcoin, Ethereum, or whatever else spouses may be holding today. That being said, attorneys have learned one very important lesson when dealing with these assets:
Crypto Remains a Somewhat Reliable Means for Concealing Assets
The first thing you should know is that many spouses are attempting to conceal assets with cryptocurrencies. Due to their decentralized and “untraceable” features, these assets can prove to be a real headache for spouses who are just trying to walk away with their fair share. In many cases, attorneys cannot access or even locate these funds because no one really knows who is holding which wallets. Each wallet is anonymously linked to its owner, and the only real way to discover the identity of the owner is for them to consciously reveal themselves. Sometimes, however, crypto investors can be coaxed (or tricked) into unveiling themselves.
An example is the divorce of Joel Greenberg, a former tax collector in Seminole County who ran into significant legal issues. These legal issues eventually resulted in a divorce, with his wife claiming that he had never provided any money for child support. As a result of these financial pressures, she pushed to have a judge liquidate her husband’s cryptocurrency account, claiming that he invested virtually all of his earnings into cryptocurrency. She also claims that he sold marital assets and then invested the proceeds into crypto. There could be millions of dollars worth of crypto waiting for Greenberg’s wife, but the court is having trouble locating and accessing these investments. In addition, the wife sought permission to sell the family home in order to receive the missing child support payments.
As a result of issues like these, it is often worth bringing in a forensic accountant or a similarly trained expert to assist with the property division process. These individuals often specialize in tracking down hidden assets, and many have considerable experience with cryptocurrencies and similar property. If anyone can track down these hidden assets, they can.
At the end of the day, the only thing you can really do is approach the situation like any other divorce and accept the challenges one by one.
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