How is cryptocurrency used to hide assets?

How is cryptocurrency used to hide assets?

On Behalf of | Mar 17, 2022 | Divorce |

Attempting to hide assets during a divorce is certainly not a new phenomenon. In fact, it arguably existed as long as laws for property and asset division have.

However, some changes still occur over the years that alter the way individuals attempt to hide their assets. This includes the advent of cryptocurrency and other digital forms of currency.

The secrecy of digital assets

CNBC dives into the world of cryptocurrency and digital assets, which some divorcees use to hide assets from their spouses. This lesser-known form of currency did not have global attention to such a degree until recent years, and it escaped the intense scrutiny and regulation of government organizations such as the IRS. Due to that, it became a perfect place for people to take their financial activities that they did not want prying eyes to see.

People will hide assets using digital currency by translating their physical money into things like bitcoins and other digital assets. They can later sell these assets, translating it back into money that they can use with greater ease in daily transactions.

Keeping an eye out for red flags

Through increased awareness of digital assets has brought stricter control and attention from the IRS and similar organizations, it is still important to keep an eye out for red flags that might indicate asset hiding.

This can include behavioral and spending changes. For example, a spouse may suddenly show more reluctance to share their financial information or access to their digital devices if they begin trading in bitcoin. They may also begin storing away money and spending notably less than usual.

Anyone who notices such actions may wish to seek legal aid to see what to do next.