Atlanta, GA- Hiding assets from an estranged spouse has long been an issue and now there is a growing concern that husbands have found a new way to hide their assets amidst a divorce: Bitcoins. Because the virtual coin is anonymous it presents the perfect opportunity to keep assets from estranged spouses especially in states where women are awarded half of her husband’s assets.
Jane Croft wrote in Financial Times that even though traditional currencies such as U.S. dollars have to be disclosed in financial statements some divorcing parties “could try to hide their wealth by converting it to Bitcoins.”
Exclusive to the internet, Bitcoins are independent of corporations, banks and governments. This virtual currency is exchanged from one party to the next through computer code and can be nearly impossible to trace to an individual unlike bank transactions and shell companies. Bitcoins are favored by technophiles, libertarians and criminals.
Each day there are approximately 70,000 Bitcoin transactions each day and close to 20,000 companies worldwide who accept the currency.
Croft writes that a number of online forums devoted to Bitcoin have popped where husbands discuss the potential of using the currency to shield their assets. Bitcoins can be traded anonymously from one wallet to another and Croft feels as though spouses can transfer money to a friend or to someone outside a jurisdiction to keep their assets hidden from their spouses and courts.
London divorce attorney, Ayesha Vardag, explained, “They can be used to run a parallel economy.” Adding, “People will go to immense lengths …as a spousal claim is more damaging than tax because it is half your wealth.”
Divorce courts have struggled to keep up with technology and Vardag believes more divorce attorneys will include digital currency in financial disclosure forms as spouses become savvier at hiding their assets.
Failing to disclose assets in a divorce can be considered perjury which is a serious offense. The consequences may vary in each jurisdiction, but a conviction can lead to jail time and financial penalties. On rare occasions, a spouse who hides their assets may be ordered to pay their estranged spouse a larger divorce settlement than they would have been forced to pay had they not been dishonest.
Even though concealing assets has consequences, approximately 31 percent of spouses admitted to hiding their assets from their spouse according the National Endowment for Financial Education.
Divorce attorneys and courts aggressively pursue assets which are often through shell companies, offshore accounts inflated business expenses and secret property. Assets can be transferred to friends and spouses; the possibilities are endless. Now attorneys will need to add digital transactions to their asset searches.
When one spouse is suspected of hiding assets, the other spouse must have an experienced divorce attorney on their side. A top notch divorce attorney can will aggressively investigate and track down the assets of an unscrupulous spouse and assure that their client receives the divorce settlement they deserve.