Fighting over money is one thing; dealing with bitcoin and other types of cryptocurrency in a divorce is an entirely different story.
As cryptocurrency has surged in popularity, its become much more common for investors to carry shares in the largely unregulated market. For married couples looking to part ways, this means dealing with cryptocurrency as an asset could make for a difficult and lengthy divorce process.
Considering regulations and standards on digital currencies such as bitcoin are still being weighed by governments and financial regulators across the world, could the future of hiding assets during a nasty divorce be lying in its hands?
Cryptocurrency is virtual currency; it lives online and is traded on a blockchain, an encrypted ledger detailing transactions. Since each transaction is associated with a public and private key, its possible for each transaction to be traced back to a single individual.
Cryptocurrency has been around for about a decade, but it became more mainstream around 2017 when bitcoin skyrocketed to a price of $20,000 per coin and caught the public eye, before giving back much of its value in the time since.
In 2018, only 5 percent of the American population held cryptocurrency, according to a survey by the Global Blockchain Business Council. An additional 21 percent of respondents, however, said they were considering adding it to their portfolio.
As cryptocurrency grows in popularity, lawyers all over the world are beginning to face divorce cases with high-value disputes over these digital assets.
Jacqueline Newman, a New York-based matrimonial law attorney, represents all different types of clients, including those divorcing with cryptocurrency. She asks all of her clients to fill out a statement of net worth a comprehensive document detailing income, assets and debt of each party. She says her forms now ask parties to include cryptocurrency, too.
It hasnt gotten to the point where the court forms include it yet, but we have asked on ours and people list it under their general assets, Newman says.
Since bitcoin and other cryptocurrencies are largely unregulated and encrypted, some might think its a perfect place to anonymously stash away funds.
But thats not necessarily the case.
Mark DiMichael, CPA, certified Financial Forensics accountant and fraud examiner, specializes in cryptocurrency. In one recent case, a husband didnt report $100,000-plus in cryptocurrency assets on his statement of net worth. During the discovery process, DiMichael closely analyzed his bank statements and was able to trace the crypto transactions through a crypto-trading platform.
DiMichael warns, however, that cases can get more complicated. The more knowledgeable someone is in crypto, the bigger the threat they pose to successfully hiding the assets.
Although he hasnt worked on a large number of cases involving cryptocurrency so far, DiMichael gives the example of a cybersecurity expert exchanging cash for bitcoin as payment. By conducting the transaction in person, there would be no proof of the transaction occurring making the asset-hiding much more difficult to reveal to the court.
Its really hard to trace if the individual knows what theyre doing, DiMichael says. An expert is going to know not to leave any evidence on their computer, and it can be much more difficult to subpoena.
Edward Davis, a Miami-based asset-recovery attorney and founding shareholder of Sequor Law, says cases of financial infidelity involving crypto are only going to become more frequent in the coming years.
In 15 to 20 years, Davis expects people with large sums of money to turn toward cryptocurrency as a way to hide their assets.
Its a real threat, Davis says. Its not going to come up in the average divorce of Joe versus Mary where they both have regular jobs and are a middle class family. But the wealthy and uber-wealthy who have access to this are going to use it to hide their value.
Matrimonial attorneys interviewed for this story say there arent currently any specific laws regarding cryptocurrency protection during a divorce process. Davis says these laws to protect consumers from fraudulent crypto activity are likely coming, but they will be slow to implement.
The legal infrastructure and regulatory infrastructure for this stuff is way behind, Davis says. If you look at some of the people sitting in Congress some of them are in their 70s and 80s they have no idea what this is. They dont even know what Snapchat is. Youre talking about a generational change [that] is going to [have to] happen before people are confronting this kind of issue.
Another issue for getting a hand on regulating crypto, Davis says, is that theres a wide misunderstanding of how blockchain technology works.
Whenever something new comes along, everyone tends to minimize it, Davis says. Predicting technology is a very hard thing. People who are intimidated or scared or dont understand technology tend to minimize it.
As interest and commonality surrounding crypto continues to increase, experts in the legal field are having to quickly educate themselves on the asset to keep up. Some experts say there isnt enough being done to inform and train legal counsel on the inner workings of the asset.
Most of what DiMichael knows about crypto is self-taught. In 2018, DiMichael published A Forensic Guide to Finding Cryptocurrency in Divorce Litigation. He created the guide after his own research found there werent many resources available on the matter.
Ive seen some courses for it, but I think there should be more training, DiMichael says. Uncovering crypto is fairly complicated, and that can be even harder for someone not trained in crypto.
Most accountants dont understand cryptocurrency, DiMichael adds. More complicated divorce cases involving cryptocurrency can be a lengthy and complicated process and for an accountant learning everything on the fly, this can mean longer hours and a higher bill for the client. DiMichael says that he currently charges $435 per hour.
Davis hasnt worked directly on a case recovering cryptocurrency assets yet, but he has noticed an upswing in industry-related conversations in the past two years. Lawyers, who he says arent technology-savvy by nature, should pay close attention to cryptocurrency and educate themselves on how to manage it in court cases.
The main concern about crypto is how little we understand it and how dangerous it is because its an unregulated, untethered currency, Davis says. This is a real threat and one we have to think about.
Follow this link:
How Cryptocurrency Assets Are Becoming A New Battleground In ...
- Fidelity Said to Offer Cryptocurrency Trading Within a Few ... - May 10th, 2019
- Is This Cryptocurrency The Next Bitcoin? - forbes.com - April 28th, 2019
- Cryptocurrency Definition | Bankrate.com - April 26th, 2019
- Samsung is developing its own blockchain network, report claims - April 26th, 2019
- 2019s best cryptocurrency wallets | 70+ compared | finder.com - April 26th, 2019
- What is cryptocurrency? - Definition from WhatIs.com - April 25th, 2019
- A Beginner's Guide to Cryptocoin Mining: What You Need to ... - April 25th, 2019
- What is Cryptocurrency: Cryptocurrency Explained the Easy Way - April 13th, 2019
- How to trade cryptocurrency in the UK - finance.yahoo.com - April 8th, 2019
- Cryptocurrency Trading | TD Ameritrade - April 8th, 2019
- Cryptocurrency Prices, Charts, and Market Cap Data - UNHASHED - April 8th, 2019
- Blow To Bitcoin As World's Largest Cryptocurrency IPO Is Iced - April 2nd, 2019
- How and where do I report Cryptocurrency coin-to-coin ... - March 22nd, 2019
- Hundreds of Millions in Cryptocurrency Vanishes After ... - March 11th, 2019
- Fidelity's new cryptocurrency company is up and running ... - March 9th, 2019
- JPMorgan is creating its own cryptocurrency - CNN - March 6th, 2019
- Cryptocurrency Exchange Says It Can't Access $190 Million ... - February 5th, 2019
- What's the Best Cryptocurrency to Invest in Today? - January 9th, 2019
- Cryptocurrency Trading Easy tips to get started | AvaTrade - January 9th, 2019
- Thailand Issues 4 Cryptocurrency Licenses, Rejects 2 ... - January 9th, 2019
- NASDAQ, Fidelity Invest in New Cryptocurrency Exchange ... - January 9th, 2019
- Cryptocurrency News | Cryptocurrency News | Blockchain ... - January 9th, 2019
- Differences Between Cryptocurrency Coins and Tokens - January 9th, 2019
- Cryptocurrency Charts - January 8th, 2019
- What is cryptocurrency? - cointelegraph.com - January 4th, 2019
- Blockchain Will Survive A Cryptocurrency Apocalypse - January 1st, 2019
- Cryptocurrency - Simple English Wikipedia, the free encyclopedia - December 25th, 2018
- Is Cryptocurrency Dead for Good? | Investopedia - December 6th, 2018
- Cryptocurrency scammers dupe Singaporeans out of $78,000 in ... - December 6th, 2018
- Invest in Cryptocurrency With Spare Change - Black Enterprise - November 28th, 2018
- What is Mining Cryptocurrency? What you need to know... - November 26th, 2018
- Saudi Arabia Will Launch Its Own Cryptocurrency in 2019 ... - November 23rd, 2018
- Bitcoin and Other Cryptocurrency Prices Are Crashing Again ... - November 17th, 2018
- Homepage - Cryptocurrency Army - November 14th, 2018
- Cryptocurrency - Simple English Wikipedia, the free ... - November 14th, 2018
- How To Create Your Own Cryptocurrency - fastcompany.com - November 14th, 2018
- Cryptocurrency price plunge worse than bursting of dotcom ... - September 18th, 2018
- Iran, North Korea and Venezuela turning to cryptocurrency ... - September 12th, 2018
- SEC halts trading in two cryptocurrency products, citing ... - September 12th, 2018
- Cryptocurrency News, ICO Reviews & Blockchain Updates ... - September 9th, 2018
- Cryptocurrency "miners," utilities look for ways to get along ... - August 29th, 2018
- Cryptocurrency: Virtual money, real power, and the fight ... - August 28th, 2018
- Pornhub Now Accepts PumaPay Cryptocurrency - August 27th, 2018
- NK hackers target Mac users with trojan cryptocurrency app ... - August 27th, 2018
- Cryptocurrency: The unlucky investors who got in at the wrong ... - August 26th, 2018
- cryptocurrency coins Archives - The Industry Spread - August 26th, 2018
- cryptocurrency Archives - Page 6 of 6 - The Industry Spread - August 26th, 2018
- Cryptocurrency investment in SMSF - hallandwilcox.com.au - August 26th, 2018
- How To Choose The Best Cryptocurrency Wallet - Crypto News AU - August 26th, 2018
- Courses | Cryptocurrency Australia - August 26th, 2018
- What Every Investor Should Know Before Buying Cryptocurrency ... - August 26th, 2018
- The biggest cryptocurrency hack in the history of blockchain - August 26th, 2018
- After the Bitcoin Boom: Hard Lessons for Cryptocurrency ... - August 21st, 2018
- Cryptocurrency Rankings | CryptoSlate - August 14th, 2018
- Bitcoin price falls after SEC postpones key ETF decision - August 12th, 2018
- Brokers Cryptocurrency Deals Are Focus of SEC Review ... - August 7th, 2018
- 7 Cryptocurrency Predictions for the Rest of 2018 - August 7th, 2018
- Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar ... - July 31st, 2018
- Bitcoin price live: Latest updates as cryptocurrency ... - July 22nd, 2018
- 2018 Bahamas Blockchain & Cryptocurrency Conference - July 16th, 2018
- Best Cryptocurrency Trading Platform 2018 | Top Crypto ... - July 13th, 2018
- Cryptocurrency: Advantages And Disadvantages Explained - July 12th, 2018
- ATB Coin - The fastest and most secure payment system - June 19th, 2018
- An Illustrated Glossary of Cryptocurrency Slang (Infographic) - June 19th, 2018
- Apollo All-in-One Cryptocurrency - June 3rd, 2018
- Cryptocurrency News, ICO Database, Coin Rankings and ... - May 25th, 2018
- CoinLib - Cryptocurrency prices now - May 21st, 2018
- Cryptocurrency Market Capitalizations | CoinMarketCap - May 4th, 2018
- CryptoCurrency Market , Coin Prices & Charts, Crypto ... - April 28th, 2018
- Nasdaq open to cryptocurrency exchange in future, says CEO - April 27th, 2018
- The 4 Top Cryptocurrency Mining Stocks -- The Motley Fool - April 27th, 2018
- One in five financial institutions consider cryptocurrency ... - April 27th, 2018
- New hacks siphon private cryptocurrency keys from ... - April 27th, 2018
- What Is Cryptocurrency? - dummies - April 21st, 2018
- Cryptocurrency Market Surges to $365 Billion, Start of a ... - April 21st, 2018
- BTCMANAGER | Bitcoin, Blockchain & Cryptocurrency News - April 16th, 2018
- How to keep your cryptocurrency safe - CNET - April 11th, 2018
- How do I report Cryptocurrency Mining income? - TurboTax ... - April 4th, 2018
- When do you report Cryptocurrency investments? - TurboTax ... - April 4th, 2018
- Trading Cryptocurrency in 2018: The Definitive Guide - March 14th, 2018