Digital assets have added new problems to high-value divorce cases. Cryptocurrency is a particularly big issue because of its purpose: security through anonymity. Unlike regular money or assets, people can easily hide, transfer or store crypto in unspecified digital wallets, making it a tempting option for hiding marital wealth during divorce.
The private nature of cryptocurrency
Cryptocurrency developers focus on privacy and decentralization, which makes revealing it during divorce difficult:
- Blockchains hide identities: While public blockchains record transactions, usernames only show up as code, making it hard to link deals to real people.
- Creating wallets is easy: Unlike traditional bank accounts, people can make crypto wallets without personal info, allowing for quick setup of many secret wallets.
- Asset transfers have fewer blocks: A person can move cryptocurrency between wallets or trading sites with little trace, making it easy to transfer money across borders.
- Owner can have full control over storage: Storing crypto offline on devices or paper makes it hard to trace without the owner’s help.
Traditional methods of finding assets often don’t work with crypto, requiring special tracking methods and experts.
Full disclosure is a legal requirement
Many states, including New Jersey, require full financial disclosure in divorces. This includes all financial information, even digital assets and wallets. Not sharing crypto assets may be seen as lying by the court, possibly leading to harsh penalties such as heavy fines or contempt of court.
In extreme cases, courts may award all hidden assets to the other spouse as punishment for intentionally hiding them. They may also impose criminal charges for lying under oath.
Guard your financial interests
As cryptocurrency becomes more common, ensuring full disclosure in divorces becomes more complex. If you’re not sure how to handle cryptocurrency in your divorce, or if you think your ex-spouse has hidden digital assets, it’s important to talk to a lawyer who knows how to navigate high-value assets in divorce cases.
