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Hiding Assets In Cryptocurrency

Image of a Bitcoin on top of a stack of cash next to a calculator.When going through a divorce, identifying and locating your spouse’s assets can often be a complicated and challenging endeavor. With the rise in the popularity of cryptocurrency in recent years, this task has become even more complex. Cryptocurrency is a currency that is maintained digitally and without reliance on banks or other central authorities. The most well-known example of cryptocurrency is Bitcoin, however, a wide array of cryptocurrencies is currently in circulation.

The cryptocurrency industry is designed in a way that allows for secrecy, and it can be difficult to identify this asset if your spouse is attempting to conceal it. In order to locate and value your spouse’s cryptocurrency, it is important for your attorney to know which entities to subpoena, what clues to look for when reviewing tax returns and bank statements, and what questions need to be asked during discovery and depositions. Once cryptocurrency is identified and valued, the next step is to determine the division of the asset. The transfer of cryptocurrency can have serious tax consequences, and it is vital that both parties be aware of these potential costs prior to reaching any settlement or commencing trial.

Cryptocurrency can be incredibly valuable, and failing to find this asset, properly value it, or being unaware of the potential tax consequences when dividing it can cost you a great deal at the end of a divorce. If you have reason to believe that your spouse may own this type of asset, exploring this possibility and beginning an investigation should occur prior to discussing a division of property. Please contact Jennifer Manley-Kapoor at 301-251-1180 or for an initial consultation about your divorce.